/roa-analysis-quiz BABA 2024 EBAY 2024

Skill_Version: 1.2 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

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. All the ratios are hidden — you’ll need to calculate them from the numbers above. I’ll ask one question at a time. Let’s go!

Question 1 of 10

A higher Asset Turnover always means a higher ROA. True or False?

    1. True
    1. False

User: B

AI: Correct! ✓

Asset Turnover is only one half of the equation. ROA = Net Profit Margin % × Asset Turnover — so even if Asset Turnover is high, a very low Net Profit Margin % can still drag ROA down. Both drivers matter.

Question 2 of 10

Using the income statement data above, calculate Alibaba’s Net Profit Margin % for FY2024. Which value is closest?

(Hint: Net Profit ÷ Net Revenue × 100)

    1. 18.4%
    1. 7.9%
    1. 13.1%
    1. 24.6%

User: B

AI: Not quite! Here’s a hint: Net Profit Margin % = Net Profit ÷ Net Revenue × 100. Find both numbers in the Income Statement — Alibaba’s Net Profit is $17,929,000 and Net Revenue is $137,300,000. Try dividing those two numbers.

Which value is closest?

    1. 18.4%
    1. 7.9%
    1. 13.1%
    1. 24.6%

User: SKIP

AI: The correct answer is c) 13.1%.

\(\$17{,}929{,}000 \div \$137{,}300{,}000 \times 100 = 13.06\%\)

For every dollar of revenue Alibaba earns, it keeps about 13 cents as net profit.

Question 3 of 10

Using the balance sheet data above, calculate eBay’s Asset Turnover for FY2024. Which value is closest?

(Hint: Net Revenue ÷ Total Assets)

    1. 0.72
    1. 0.43
    1. 0.88
    1. 0.53

User: SKIP

AI: The correct answer is d) 0.53.

\(\$10{,}283{,}000 \div \$19{,}365{,}000 = 0.531\)

For every dollar of assets eBay owns, it generates about 53 cents in revenue.

Question 4 of 10

Using the income statement data above, calculate Alibaba’s Operating Profit Margin % for FY2024. Which value is closest?

(Hint: Operating Profit ÷ Net Revenue × 100)

    1. 14.1%
    1. 22.5%
    1. 8.3%
    1. 19.9%

User: NEXT

AI: The correct answer is a) 14.1%.

\(\$19{,}417{,}000 \div \$137{,}300{,}000 \times 100 = 14.14\%\)

Question 5 of 10

Using the Strategic Profit Model, calculate eBay’s ROA for FY2024. Which value is closest?

(Hint: you’ll need eBay’s Net Profit Margin % and Asset Turnover — calculate both from the tables first)

    1. 5.4%
    1. 10.2%
    1. 14.7%
    1. 7.2%

User: NEXT

AI: The correct answer is b) 10.2%.

First calculate eBay’s Net Profit Margin %: \(\$1{,}975{,}000 \div \$10{,}283{,}000 \times 100 = 19.21\%\)

Then Asset Turnover: \(\$10{,}283{,}000 \div \$19{,}365{,}000 = 0.531\)

Then ROA: \(19.21\% \times 0.531 = 10.20\%\)

It looks like you’re skipping a lot — is something not working, or would you like to stop the quiz and make more changes to the skill?

User: CAN YOU SHOW ME POTENTIAL QUESTION LIST NOW

AI: Here’s the full question pool from the skill:

Tier 1 — Foundational

  1. What is the formula for ROA using the Strategic Profit Model? (MC)
  2. ROA = Net Profit Margin % × Asset Turnover. True or False? (T/F)
  3. A higher Asset Turnover always means a higher ROA. True or False? (T/F)
  4. What does Asset Turnover measure? (MC)
  5. What does Net Profit Margin % tell us? (MC)

Tier 2 — Component Calculation

  1. Calculate Company 1’s Net Profit Margin % (from Net Profit ÷ Revenue)
  2. Calculate Company 2’s Net Profit Margin %
  3. Calculate Company 1’s Asset Turnover (from Revenue ÷ Total Assets)
  4. Calculate Company 2’s Asset Turnover
  5. Calculate Company 1’s Gross Margin %
  6. Calculate Company 2’s Gross Margin %
  7. Calculate Company 1’s Operating Profit Margin %
  8. Calculate Company 2’s Operating Profit Margin %

Tier 3 — ROA Calculation

  1. What is Company 1’s ROA? (Net Profit Margin % × Asset Turnover)
  2. What is Company 2’s ROA?
  3. Which component drives Company 1’s ROA more — margin or turnover?
  4. Which component drives Company 2’s ROA more?

Tier 4 — Comparison & Interpretation

  1. Which company has the higher ROA?
  2. Which company has the higher Net Profit Margin %?
  3. Which company has the higher Asset Turnover?
  4. Company X has higher margin but lower turnover — which has higher ROA?
  5. Both companies are in the same segment — what does the ROA difference tell you?

Tier 5 — What-If

  1. If Company 1 improves Net Profit Margin % by 1 pp, what happens to ROA?
  2. If Company 2 improves Net Profit Margin % by 1 pp, what happens to ROA?
  3. If Company 1 doubles its Asset Turnover, what happens to ROA?
  4. If Company 2 doubles its Asset Turnover, what happens to ROA?
  5. Company 1’s ROA dropped 2 pp while Asset Turnover was unchanged — what happened?
  6. If Company 2 cuts prices (margin −2 pp, turnover +0.1), does ROA go up or down?

User: OK cool for now save the session