Question

Identify and Compute NOPAT Following is the income statement for Lowe's Companies Inc. LOWE'S COMPANIES INC. Consolidated Statement of Earnings Twelve Months Ended (in millions) Feb. 1. 2019 Net sales $71,309 Cost of sales 48,401 Gross margin 22.908 Expenses Selling general and administrative 17,413 Depreciation and amortization 1.477 Operating income 4,018 Interest expense, net 624 Pretax earnings 3.394 Income tax provision 1.090 Net earnings $2.314 Compute its net operating profit after tax (NOPAT) for the 12 months ended ended February 1, 2019, assuming a 22% total statutory tax rate. Note: Round your answer to the nearest whole dollar. $

Answer 1

Operating profit is the profit from an organization's operation before deduction of any interest or tax.

Net operating profit after tax= Operating profit × (1-tax)

Here operating profit is given in question

Operating profit = $ 4018

Statutory tax rate = 22%

NOPAT = 4018 × (1-22%)

= 4018 × 0.78

= 3134.04

NOPAT = $ 3134

Please provide feedback if it was helpful.