Question

Compute NOPAT Selected income statement information for 2018 is presented below for Home Depot Inc. and Lowes Companies in P i need help with 1,2,3
0 0
Add a comment Improve this question Transcribed image text
Answer #1

Solution:

a) Here we have 2 companies , Home Depot and Lowe.

1. Net Operating Profit (NOPAT) IS

= Net Operating Profit Before Tax - Tax expense

Net Operating Profit of 2 companies are

Home Depot :  

= 15841 - 3504 = $12337

Lowe's  :

= 4098 - 1080 = $3018

2. Return on Net Operating Assets (RNOA)

= Net Operating Profit / Average Net Operating Assets

Home Depot

= 12337/ 25721 = 47.9%

Lowe's

= 3018/ 20326 = 14.8%

3. Net Operating Profit Margin (NOPM) is

= Net Operating Profit / Sales

Home Depot

= 12337/ 108203 = 11.4%

Lowe's

= 3018/ 72735 = 4.14%

4. Net Operating Asset Turnover (NOAT) is

= Sales/ Average Net Operating Asset

Home Depot

=108203/ 25721 = 4.20

Lowe's

= 72735/ 20326 = 3.57

b)

1. More profitable ( in $ ) is Home Depot. Because Home Depot Net Operating Profit Margin is higher than Lowe's net operating profit margin.. Home depot 11.4% and Lowe's 4.14%.

2. Home depot produces the higher profit margin (%) .. Home depot 11.4% , Lowe's 4.14%

   3. Home depot uses its Net Operating Asset ( NOA) more efficiently. Because Home depot Return on Asset is higher than Lowe's. Home depot 47.9% , Lowe's 14.8%

4. Home depot produces the higher return on Net Operating Asset.It indicates that management is maximizing the use of the company's assets.

  

Add a comment
Know the answer?
Add Answer to:
i need help with 1,2,3 Compute NOPAT Selected income statement information for 2018 is presented below...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • Selected Income statement information for 2018 is presented below for Home Depot, Inc. and Lowe's Companies...

    Selected Income statement information for 2018 is presented below for Home Depot, Inc. and Lowe's Companies Inc. Assume the statutory tax rate is 22%. Question 6 Not complete Marked out of 12.00 P Rag question Compute NOPAT Selected income statement information for 2018 is presented below for Home Depot Inc. and Lowe's Companies Inc. Assume the statutory tax rate is 22% Pretax Net Average Net Nonoperating Tax Operating Company (5 millions) Ticker Sales NOPET Expense Expense Assets Home Depot HD...

  • Compute RNOA, Net Operating Profit Margin, and NOA Turnover Selected balance sheet and income statement information...

    Compute RNOA, Net Operating Profit Margin, and NOA Turnover Selected balance sheet and income statement information for Netflix Inc. the world's leading Internet entertainment service, follows. 2018 Net 2017 Net 2018 2018 Operating Operating Revenue NOPAT Assets Assets $15,794,341 $1,506,681 $11,804,340 $7,258,593 Company ($ thousands) Ticker Netflix, Inc NFLX a. Compute return on net operating assets (RNOA). Note: Round percentage to one decimal places (for example, enter 6.7% for 6.6555%). % b. Disaggregate RNOA into net operating profit margin (NOPM)...

  • Compute RNOA, Net Operating Profit Margin, and NOA Turnover for Competitors Selected balance sheet and income...

    Compute RNOA, Net Operating Profit Margin, and NOA Turnover for Competitors Selected balance sheet and income statement information for the fiscal year ended February 2, 2019, for Abercrombie & Fitch Co. and TJX Companies Inc., clothing retailers in the high-end and value-priced segments, respectively, follows. Current Prior Year Net Year Net Operating Operating Assets Assets Company ($ millions) Ticker Abercrombie & Fitch ANE TJX Companies TJX Sales NOPAT $3,590.10 $87.40 38,972.90 3,066.70 $792.30 $877.30 4,252.00 4,114.30 Compute the following ratios...

  • Compute ROE and RNOA with Disaggregation Selected balance sheet and income statement information for Home Depot...

    Compute ROE and RNOA with Disaggregation Selected balance sheet and income statement information for Home Depot follows. Please help. I have figured out part a and the NOAT of part d. Everything else I cannot find. Compute ROE and RNOA with Disaggregation Selected balance sheet and income statement information for Home Depot follows. $ millions Operating assets Nonoperating assets Total assets Operating liabilities Nonoperating liabilities Total liabilities Total stockholders' equity Sales Net operating profit before tax (NOPBT) Nonoperting expense before...

  • Compute ROE and RNOA with Disaggregation Selected balance sheet and income statement information for Home Depot...

    Compute ROE and RNOA with Disaggregation Selected balance sheet and income statement information for Home Depot follows. Compute ROE and RNOA with Disaggregation Selected balance sheet and income statement information for Home Depot follows. $ millions Operating assets Nonoperating assets Total assets Operating liabilities Nonoperating liabilities Total liabilities Total stockholders' equity Sales Net operating profit before tax (NOPBT) Nonoperting expense before tax Tax expense Net income Jan. 31, 2016 Feb. 01, 2015 $40,683 $38,573 2,266 1,773 42,949 40,346 15,043 13,552...

  • Selected balance sheet and income statement information for Home Depot follows. Compute ROE and RNOA with...

    Selected balance sheet and income statement information for Home Depot follows. Compute ROE and RNOA with Disaggregation Selected balance sheet and income statement information for Home Depot follows. $ millions Operating assets Nonoperating assets Total assets Operating liabilities Nonoperating liabilities Total liabilities Total stockholders' equity Sales Net operating profit before tax (NOPBT) Nonoperting expense before tax Tax expense Net income Jan. 31, 2016 Feb. 01, 2015 $40,683 $38,573 2,266 1,773 42,949 40,346 15,043 13,552 21,275 17,157 36,318 30,709 6,631 9,637...

  • Compute RNOA with Disaggregation Selected balance sheet and income statement information for Home Depot follows. $...

    Compute RNOA with Disaggregation Selected balance sheet and income statement information for Home Depot follows. $ millions Jan. 31, 2016 Feb. 01, 2015 Operating assets $40,683 $38,573 Nonoperating assets 2,266 1,773 Total assets 42,949 40,346 Operating liabilities 15,043 13,552 Nonoperating liabilities 21,275 17,157 Total liabilities 36,318 30,709 Sales 89,234 Net operating profit before tax (NOPBT) 12,124 Nonoperting expense before tax 803 Tax expense 4,001 Net income 7,320 Round answers to two decimal places (ex: 0.12345 = 12.35%). a. Compute return...

  • Compute RNOA with disaggregation. Compute RNOA with Disaggregation Refer to the balance sheet information below for...

    Compute RNOA with disaggregation. Compute RNOA with Disaggregation Refer to the balance sheet information below for Home Depot. $ millions Feb. 3, 2019 Jan. 28, 2018 Operating assets $42,225 $40.934 Nonoperating assets 1,778 3,595 Total assets $44,003 $44,529 Operating liabilities $16,679 $16,047 Nonoperating liabilities 29,202 27,028 Total liabilities $45,881 $43,075 Net sales $108,203 Operating expense before tax 92,673 Net operating profit before tax (NOPBT) 15,530 Other expense 974 Income before tax 14,556 Tax expense Net income 3,435 $11,121 Round all...

  • 40,346 Compute ROE and RNOA with Disaggregation Selected balance sheet and income statement information for Home...

    40,346 Compute ROE and RNOA with Disaggregation Selected balance sheet and income statement information for Home Depot follows. S millions Jan. 31, 2016 Feb. 01, 2015 Operating assets $40633 538.573 Nonoperating assets 2.266 1.773 Total assets 42.9.49 Operating abilities 15.043 13,552 Nonoperating liabilities 21.275 17,157 Total liabilities 36.318 30.709 Total stockholders' equity 9.637 Sales 89,234 Net operating profit before tax (NOPBT) 12.124 Nonoperting expense before tax 303 Tax expense 4,001 Net Income 7.320 6,631 Round answers to two decimal places...

  • Refer to the balance sheet information below for Home Depot. Compute RNOA with Disaggregation Refer to...

    Refer to the balance sheet information below for Home Depot. Compute RNOA with Disaggregation Refer to the balance sheet Information below for Home Depot. S millions Feb. 3. 2019 Jan 28, 2018 Operating assets $42.225 540,934 Nonoperating assets 1.778 3.595 Total assets $44003 $44,529 Operating liabilities 516,679 516,047 Nonoperating liabilities 29.202 27.028 Total abilities 545.881 $43.075 Net sales $100.203 Operating expense before tax 92.673 Net operating profit before tax (NOPBT) 15.530 Other expense 974 Income before tax 14.556 Tax expense...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT