Compute and Interpret Ratios Selected balance sheet and income statement information from Illinois Tool Works follows. $ millions Net operating profit after tax (NOPAT) $2,897 $3,009 Net income 2,798 2,845 Total assets 15,671 15,465 $17,451 Equity 3,147 3,384 3,384 10,493 Net operating profit after tax (NOA) 9,224 9,840 Treasury stock 21,070 19,475 17,274 a. Compute profitability measures: RNOA, ROA and ROE for 2019 and 2018 using the numbers as reported by the company. Note: Round answers to one decimal place (ex: 0.2345 = 23.5%). 2018 Metric RNOA ROA ROE 2019 $ millions Assets, restated $ Equity, restated % % % b. Adjust equity and total assets for the amount of treasury stock. 2019 2018 2017 Metric 2019 RNOA ROA ROE 2019 2018 2017 % % % $ $ % % % Using these restated numbers, recompute RNOA, ROA and ROE for both years. Note: Round answers to one decimal place (ex: 0.2345 = 23.5%). 2018 % % % $
Compute and Interpret Ratios Selected balance sheet and income statement information from Illinois Tool Works follows. $ millions Net operating profit after tax (NOPAT) $2,897 $3,009 Net income 2,798 2,845 Total assets 15,671 15,465 $17,451 Equity 3,147 3,384 3,384 10,493 Net operating profit after tax (NOA) 9,224 9,840 Treasury stock 21,070 19,475 17,274 a. Compute profitability measures: RNOA, ROA and ROE for 2019 and 2018 using the numbers as reported by the company. Note: Round answers to one decimal place (ex: 0.2345 = 23.5%). 2018 Metric RNOA ROA ROE 2019 $ millions Assets, restated $ Equity, restated % % % b. Adjust equity and total assets for the amount of treasury stock. 2019 2018 2017 Metric 2019 RNOA ROA ROE 2019 2018 2017 % % % $ $ % % % Using these restated numbers, recompute RNOA, ROA and ROE for both years. Note: Round answers to one decimal place (ex: 0.2345 = 23.5%). 2018 % % % $
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter15: Financial Statement Analysis
Section: Chapter Questions
Problem 19BEA
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