Question

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 3,435 Net income $11,121 Round all answers to two decimal places (ex: 0.12345 = 12.35%) a. Compute return on net operating assets (RNOA). b. 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 NOAT Check

Answer 1

Answer:-

a)

Return on net Operating Assets =Net Operating Profit After tax / Net Operating Assets x 100

=15530*78% / 42225 x 100

=12113.40/42225 x 100

Therefore, The RNOA is 28.69%

b)

NOPM = Net Operating Profit After Tax / Net Sales x 100

NOPM = 15530*78%/108203 x 100

=12113.40/108203 x 100

Therefore, The NOPM is 11.19%

NOAT = Sales / Net Operating Assets x 100

=108203/42225 x 100

Therefore, The NOAT is 256.25%

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