You are thinking about investing in Facebook Inc. and like to do some research about its profitability. Its latest financial statements show total equity of $74,374 million, revenues of $40,653 million, and net income of $15,920 million.
a. What are Facebook's net profit margin and return on equity?
b. You find the industry average net profit margin of 23.38% and the industry average return on equity of 16.45%. Based on the information, do you find Facebook underperforming or outperforming in terms of profitability?