/roa-analysis-quiz BABA 2024 EBAY 2024
Skill_Version: 1.0 Student: catie Model: sonnet-4-6 Date: 2026-06-18
AI: Comparing Alibaba FY2024 vs. eBay FY2024.
Note: All dollar amounts below are in thousands. For example, $137,300,000 means approximately $137.3 billion in actual dollars.
Income Statement
| Alibaba (FY2024) | eBay (FY2024) | |
|---|---|---|
| Net Revenue | $137,300,000 | $10,283,000 |
| Cost of Goods (COGS) | $82,446,000 | $2,880,000 |
| Gross Margin | $54,854,000 | $7,403,000 |
| SG&A | $25,943,000 | $3,233,000 |
| Operating Profit | $19,417,000 | $2,318,000 |
| Net Profit | $17,929,000 | $1,975,000 |
Key Ratios & ROA Components
| Alibaba (FY2024) | eBay (FY2024) | |
|---|---|---|
| Gross Margin % | 39.95% | 71.99% |
| SG&A % of Revenue | 18.90% | 31.44% |
| Operating Margin % | 14.14% | 22.54% |
| Net Profit Margin % | 13.06% | 19.21% |
| Asset Turnover | 0.55 | 0.53 |
| ROA | 7.21% | 10.20% |
| Inventory Turnover | N/A | N/A |
Balance Sheet
| Alibaba (FY2024) | eBay (FY2024) | |
|---|---|---|
| Inventory | N/A | N/A |
| Current Assets | $92,886,000 | $7,567,000 |
| Total Assets | $248,629,000 | $19,365,000 |
| Current Liabilities | $59,992,000 | $6,098,000 |
| Total Liabilities | $98,409,000 | $14,207,000 |
| Total Equity | $150,220,000 | $5,158,000 |
I’ve pulled up Alibaba FY2024 (Resale) vs. eBay FY2024 (Resale). We’re going to work through some questions on Return on Assets (ROA) and the Strategic Profit Model. I’ll ask one question at a time — take your time, and just reply with a single letter if you want to keep it short. Let’s start!
Question 1 of 10
What is the formula for ROA using the Strategic Profit Model?
- Net Profit Margin % × Asset Turnover
- Net Profit Margin % + Asset Turnover
- Gross Margin % × Inventory Turnover
- Operating Profit Margin % ÷ Total Assets
User: d
AI: Not quite! Here’s a hint: ROA measures how much profit a company generates from its assets. The Strategic Profit Model breaks that down into two drivers — one measures how profitable each sale is, and the other measures how hard the assets are working to generate sales.
Which formula combines those two ideas?
- Net Profit Margin % × Asset Turnover
- Net Profit Margin % + Asset Turnover
- Gross Margin % × Inventory Turnover
- Operating Profit Margin % ÷ Total Assets
User: a
AI: Correct! ✓
\[\text{ROA} = \text{Net Profit Margin \%} \times \text{Asset Turnover}\]
The two components multiply together — not add. That’s important because if either one is zero, ROA collapses to zero too. Both drivers have to be working.
Question 2 of 10
ROA = Net Profit Margin % + Asset Turnover. True or False?
- True
- False
User: b
AI: Correct! ✓
The formula uses multiplication, not addition. ROA = Net Profit Margin % × Asset Turnover. Adding them would produce a meaningless number — you’d be mixing a percentage with a ratio.
Question 3 of 10
Looking at the data, what is Alibaba’s Net Profit Margin % for FY2024?
- 19.21%
- 14.14%
- 13.06%
- 39.95%
User: c
AI: Correct! ✓
Alibaba’s Net Profit Margin % is 13.06% — meaning for every dollar of revenue, Alibaba keeps about 13 cents as net profit after all expenses and taxes. Notice that eBay’s is higher at 19.21%, even though Alibaba is a much larger company.
Question 4 of 10
What is eBay’s Asset Turnover for FY2024?
- 0.72
- 0.55
- 1.03
- 0.53
User: d
AI: Correct! ✓
eBay’s Asset Turnover is 0.53 — meaning for every dollar of assets, eBay generates about 53 cents in revenue. Notice how close it is to Alibaba’s 0.55. Both are marketplace/platform businesses with no physical inventory, so neither is generating a lot of revenue relative to their asset base.
Question 5 of 10
Using the Strategic Profit Model, which value is closest to Alibaba’s ROA for FY2024?
(Hint: Net Profit Margin % × Asset Turnover)
- 7.21%
- 10.20%
- 5.83%
- 3.94%
User: a
AI: Correct! ✓
\(13.06\% \times 0.5522 = 7.21\%\)
Alibaba earns 13 cents of profit per dollar of sales, and generates 55 cents of sales per dollar of assets — multiply those together and you get about 7.21% ROA.
Question 6 of 10
Using the Strategic Profit Model, which value is closest to eBay’s ROA for FY2024?
(Hint: Net Profit Margin % × Asset Turnover)
- 7.21%
- 10.20%
- 14.32%
- 5.67%
User: ok stop lets modify this skill