A-1 Compute RNOA with DisaggregationRefer to the balance sheet information below for Home Depot.Operating assetsNonoperating assetsTotal assets$ millionsOperating liabilitiesNonoperating liabilitiesTotal liabilitiesNet salesOperating expense before taxNet operating profit before tax (NOPBT)Other expenseIncome before taxTax expenseNet incomeNOATFeb. 3. 2019 Jan. 28, 2018$42.225$40,9343.595$44,529$16,04727,028$43.075Check1,778$44.003$16,67929.202$45.881$108.20392,67315.530974Round all answers to two decimal places (ex: 0.12345 - 12.35%)a. Compute return on net operating assets (RNOA).14,5563,435$11,121b. Disaggregate RNOA into components of profitability and productivity and show that the product of the two components equals RNOA. Assume a statutory tax rate of 22%.NOPM

Net operating assets are nothing but the difference between the operating assets and liabilities of…

Compute RNOA with Disaggregation Refer to the balance sheet information below for Home Depot. $ millions Operating assets Nonoperating assets Total assets Operating liabilities Nonoperating liabilities Total liabilities Net sales Operating expense before tax Net operating profit before tax (NOPET) Other expense Income before tax Tax expense Net income Feb. 3, 2019 Jan 28, 2018 $42.225 $40.934 1,778 3.595 $44,003 $44,529 $16.679 $16,047 29.202 27,028 $45.881 $43.075 $108.203 92.673 15.530 974 14,556 3,435 $11,121

Compute RNOA with Disaggregation Refer to the balance sheet information below for Home Depot. $ millions Operating assets Nonoperating assets Total assets Operating liabilities Nonoperating liabilities Total liabilities Net sales Operating expense before tax Net operating profit before tax (NOPET) Other expense Income before tax Tax expense Net income Feb. 3, 2019 Jan 28, 2018 $42.225 $40.934 1,778 3.595 $44,003 $44,529 $16.679 $16,047 29.202 27,028 $45.881 $43.075 $108.203 92.673 15.530 974 14,556 3,435 $11,121

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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Compute Net Operating Profit after Tax Refer to the balance sheet information below for Home Depot. $ millions Feb. 3, 2019 Jan. 28, 2018 Operating assets $27,446 $26,607 Nonoperating assets 1,156 2,337 Total assets $28,602 $28,944 Operating liabilities $10,841 $10,431 Nonoperating liabilities 18,981 17,568 Total liabilities $29,822 $27,999 Net sales $70,332 Operating expense before tax 60,237 Net operating profit before tax (NOPBT) 10,095 Other expense 633 Income before tax 9,462 Tax expense 2,233 Net income $7,229 Assume a statutory tax rate of 22%. a. Compute NOPAT for the year ended Feb. 3, 2019 using the formula: NOPAT = Net income + NNE Net income NNE NOPAT Answer Answer b. Compute NOPAT for the year ended Feb. 3, 2019 using the formula: NOPAT = NOPBT − Tax on operating profit NOPBT Tax on operating profit NOPAT Answer Answer
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