Question

Compute NOPAT Using Tax Rates from Tax Footnote
The income statement for The TJX Companies, Inc., follows.

THE TJX COMPANIES, INC. Consolidated Statements of Income
Fiscal Year Ended ($ thousands)	January 29, 2005
Net sales	$14,913,483
Cost of sales, including buying and occupancy costs	11,398,656
Selling, general and administrative expenses	2,500,119
Provision (credit) for computer intrusion related costs	-
Interest expense (revenue), net	25,757
Income from continuing operations before provision for income taxes	988,951
Provision for income taxes	379,252
Income from continuing operations	609,699
Gain/(loss) from discontinued operations, net of income taxes	-
Net income	$ 609,699
U.S. federal statutory income tax rate	35.0%
Effective state income tax rate	4.3%
Impact of foreign operation	-0.4%
All other	-0.4%
Worldwide effective income tax rate	38.5%

a. Compute TJX's 2004 statutory tax rate using its income tax footnote disclosure.

Round answer to one decimal place (ex: 0.2345 = 23.5%).

__________%

b. Compute TJX's NOPAT for fiscal year 2004 using its tax rate from part a.

Round to the nearest whole number.
$________

Answer 1

Answer:- a) 75x5 2004 ststulory Tax rate = 0.3. federal statutory income tax rate + Effective state income tax rate. 35% +4.3% :: 7Jx6 2004 statuslovy Tax vale -39.3.% b) T5x's NOPAT for fiscal year 2004 = Net operaling profit before - Tax (NOPBT) - Tax on operating profit Net operating profit be fore Tax :- Amount - particulars 414,913,483 Net sales cost of sales, including buying and occupancy costa $ 11,398,656) Selling, General and administrative expenses |4$ 2,500,119) Net operating profit before Tax $1,014,708 Tax on operating profit = Tax expense + (pre tax Net non- Operating erpense x statutory Tax vale) 5 $379,252 +(425,757 X 39.3%) :: Tax on operating profit = $ 389,375 TJxé Nopat for fiscal year 2004 = $1,014,708 – $389,375 :. TJ xã NOPAT for fiscal Year 2004 = $625,333.