Compute and Interpret Ratios Selected balance sheet and income statement information from Illinois Tool Works follows. $ millions 2019 2018 2017 Net operating profit after tax (NOPAT) $2,610 $2,711 Net income 2,521 2,563 Total assets 15,068 14,870 $16,780 Equity 3,026 3,254 3,254 Net operating profit after tax (NOA) 8,869 9,462 10,089 Treasury stock 18,982 17,545 15,562 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
Compute and Interpret Ratios Selected balance sheet and income statement information from Illinois Tool Works follows. $ millions 2019 2018 2017 Net operating profit after tax (NOPAT) $2,610 $2,711 Net income 2,521 2,563 Total assets 15,068 14,870 $16,780 Equity 3,026 3,254 3,254 Net operating profit after tax (NOA) 8,869 9,462 10,089 Treasury stock 18,982 17,545 15,562 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
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 32BEB
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Question
Compute and Interpret Ratios
Selected balance sheet and income statement information from Illinois Tool Works follows.
| $ millions | 2019 | 2018 | 2017 |
|---|---|---|---|
| $2,610 | $2,711 | ||
| Net income | 2,521 | 2,563 | |
| Total assets | 15,068 | 14,870 | $16,780 |
| Equity | 3,026 | 3,254 | 3,254 |
| Net operating profit after tax (NOA) | 8,869 | 9,462 | 10,089 |
| 18,982 | 17,545 | 15,562 |
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%).
| Metric | 2019 | 2018 |
|---|---|---|
| RNOA | Answer
|
Answer
|
| ROA | Answer
|
Answer
|
| ROE | Answer
|
Answer
|
b. Adjust equity and total assets for the amount of treasury stock.
| $ millions | 2019 | 2018 | 2017 |
|---|---|---|---|
| Assets, restated | Answer
|
Answer
|
Answer
|
| Equity, restated | Answer
|
Answer
|
Answer
|
Using these restated numbers, recompute RNOA, ROA and ROE for both years.
Note: Round answers to one decimal place (ex: 0.2345 = 23.5%).
| Metric | 2019 | 2018 |
|---|---|---|
| RNOA | Answer
|
Answer
|
| ROA | Answer
|
Answer
|
| ROE | Answer
|
Answer
|
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