AMCE reported the following results for the past two years. 2018 2017 Profit margin 7.0% 5.0%...
AMCE reported the following results for the past two years.
2018 2017
Profit margin 7.0% 5.0%
Asset turnover 2.0 2.5
Net borrowing cost (NBC) 3.0% 3.3%
Average net financial obligations (millions) $2,250 $1,000
Average common equity (millions) $4,500 $ 4,000
A. Calculate the return on net operating assets (RNOA) and show how much of its change from 2017 to 2018 is due to change in profit margin and the change in asset turnover.
B. Explain how much of the change in ROCE from 2017 to 2018 is due to operating activities and how is due to financing activities.
3. What is the principle assumption that allows an analyst to modify a residual earnings (RE) model to a residual operating earnings (ReOI) model? In your answer, explain the primary benefit of a ReOI model over the RE model.
Homework Answers
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AMCE reported the following results for the past two years.
2018 2017
Profit margin 7.0% 5.0%...
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)...
Graphical representations of the Ingersoll Rand 2018 income statement and average balance sheets (2017-2018) follow. Compute,...
Graphical representations of the Ingersoll Rand 2018 income
statement and average balance sheets (2017-2018) follow.
Compute, Disaggregate, and Interpret ROE and RNOA Graphical representations of the Ingersoll Rand 2018 income statement and average balance sheets (2017-2018) follow. Income Statement 2018 Average Balance Sheet 2017-2018 $54.4 $7,081,5 S15,6682 $14,088.7 $4,077.7 $16,817.7 S6,830,6 $1,337,6 $1.226.4 Operating assets Nonoperating assets Operating expenses including tax on operating profit Operating liabilities Nonoperating abilities Earning attributable to company shareholders Company shareholders' Noncontrolling interest Sales equity a....
Graphical representations of the Ingersoll Rand 2018 income statement and average balance sheets (2017-2018) follow. Compute,...
Graphical representations of the Ingersoll Rand 2018 income
statement and average balance sheets (2017-2018) follow.
Compute, Disaggregate, and Interpret ROE and RNOA Graphical representations of the Ingersoll Rand 2018 income statement and average balance sheets (2017-2018) follow. Income Statement 2018 Average Balance Sheet 2017-2018 $54.4 $7,081,5 $15,668 2 $14,088.7 $4,077.7 $16,817.7 $6,830,6 $1,226.4 $1,337,6 Operating assets Nonoperating assets Operating expenses including tax on operating profit Operating liabilities Nonoperating liabilities Earning attributable to company shareholders Company shareholders Noncontrolling interest Sales equity...
(a) Compute net operating profit after tax (NOPAT) for 2018. Assume that the combined federal and...
(a) Compute net operating profit after tax (NOPAT) for 2018.
Assume that the combined federal and state statutory tax rate is
22%. (Round your answer to the nearest whole number.)
2018 NOPAT =Answer
($ millions)
(b) Compute net operating assets (NOA) for 2018 and 2017.
2018 NOA =Answer
($ millions)
2017 NOA =Answer
($ millions)
(c) Compute and disaggregate 3M’s RNOA into net operating profit
margin (NOPM) and net operating asset turnover (NOAT) for 2018.
Demonstrate that RNOA = NOPM...
Use the following financial statements for Lake of Egypt Marina, Inc. 2018 2017 $ 48 $...
Use the following financial statements for Lake of Egypt Marina, Inc. 2018 2017 $ 48 $ 50 55 44 Assets Current assets: Cash and marketable securities Accounts receivable Inventory Total Fixed assets: Gross plant and equipment Less: Depreciation 40 LAKE OF EGYPT MARINA, INC. Balance Sheet as of December 31, 2018 and 2017 (in millions of dollars) 2018 2017 Liabilities and Equity Current liabilities: $ 50 $ 56 Accrued wages and taxes 60 52 Accounts payable 205 Notes payable $315...
Compute, Disaggregate, and Interpret ROE and RNOA Graphical representations of the Ingersoll Rand 2018 income statement...
Compute, Disaggregate, and Interpret ROE and RNOA Graphical representations of the Ingersoll Rand 2018 income statement and average balance sheets (2017-2018) follow. Income Statement 2018 Average Balance Sheet 2017-2018 $54.4 $7,081.5 $4,077.7 $16,817.7 $15,668.2 $14,088.7 $6,830.6 $1,337.6 $1,226.4 Operating assets Nonoperating assets Operating expenses including tax on operating profit Operating liabilities Nonoperating liabilities Earning attributable to company shareholders Company shareholders' Noncontrolling interest Sales equity a. Compute the 2018 return on equity (ROE) and 2018 return on net operating assets (RNOA)....
Use the following financial statements for Lake of Egypt Marina, Inc. 2018 2017 LAKE OF EGYPT...
Use the following financial statements for Lake of Egypt Marina, Inc. 2018 2017 LAKE OF EGYPT MARINA, INC. Balance Sheet as of December 31, 2018 and 2017 (in millions of dollars) 2018 2017 Liabilities and Equity Current liabilities: $ 50 $ 56 Accrued wages and taxes 60 52 Accounts payable 205 Notes payable $315 $204 Total $ 48 $ 50 55 Assets Current assets: Cash and marketable securities Accounts receivable Inventory Total Fixed assets: Gross plant and equipment Less: Depreciation...
Use the information from the Income Statements and Balance Sheets to calculate the ratios in the...
Use the information from the Income Statements and
Balance Sheets to calculate the ratios in the image below for years
provided (Numbers 1-6):
Please provide examples of each equation used so that I
may create an excel file and replicate process.
Jan. 27, 2019 12 Months Ended Jan. 28, Jan. 29, 2018 2017 Jan. 31, 2016 $ 11,716 4,545 7,171 $ 9,714 3,892 5,822 $ 6,910 2,847 4,063 $ 5,010 2,199 2,811 1,797 2,376 991 1,463 663 815 3 2,612...
Calculate the following ratios based on Wendy's 2017 and 2018 financial statements and comment on the...
Calculate the following ratios based on Wendy's 2017 and 2018
financial statements and comment on the differences between FY 2017
and FY 2018.
Wendy's
FY 2017
FY 2018
Liquidity
Current Ratio:
Quick Ratio:
Comments on the companies' liquidity - what do the numbers
say?
Asset Management
Total Asset Turnover:
Avg Collection Period:
Comments on the companies' asset management - what do the numbers
say?
Debt Management
Total Debt to Total Assets:
Times Interest Earned:
Comments on the companies' debt management...
Hometown Supply Company reported the following information in its comparative financial statements for the fiscal year...
Hometown Supply Company reported the following information in its comparative financial statements for the fiscal year ended January 31, 2018: E: (Click the icon to view the data.) Read the requirements. Requirement 1. Compute net profit margin ratio (%) for the years ended January 31, 2018 and 2017. Did it improve or worsen in 2018? Identify the formula, then calculate profit margin for 2018 and 2017. (Round your answers to the nearest hundredth of a percent, X.XX%.) = Net profit...
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)...
Graphical representations of the Ingersoll Rand 2018 income
statement and average balance sheets (2017-2018) follow.
Compute, Disaggregate, and Interpret ROE and RNOA Graphical representations of the Ingersoll Rand 2018 income statement and average balance sheets (2017-2018) follow. Income Statement 2018 Average Balance Sheet 2017-2018 $54.4 $7,081,5 S15,6682 $14,088.7 $4,077.7 $16,817.7 S6,830,6 $1,337,6 $1.226.4 Operating assets Nonoperating assets Operating expenses including tax on operating profit Operating liabilities Nonoperating abilities Earning attributable to company shareholders Company shareholders' Noncontrolling interest Sales equity a....
Graphical representations of the Ingersoll Rand 2018 income
statement and average balance sheets (2017-2018) follow.
Compute, Disaggregate, and Interpret ROE and RNOA Graphical representations of the Ingersoll Rand 2018 income statement and average balance sheets (2017-2018) follow. Income Statement 2018 Average Balance Sheet 2017-2018 $54.4 $7,081,5 $15,668 2 $14,088.7 $4,077.7 $16,817.7 $6,830,6 $1,226.4 $1,337,6 Operating assets Nonoperating assets Operating expenses including tax on operating profit Operating liabilities Nonoperating liabilities Earning attributable to company shareholders Company shareholders Noncontrolling interest Sales equity...
(a) Compute net operating profit after tax (NOPAT) for 2018.
Assume that the combined federal and state statutory tax rate is
22%. (Round your answer to the nearest whole number.)
2018 NOPAT =Answer
($ millions)
(b) Compute net operating assets (NOA) for 2018 and 2017.
2018 NOA =Answer
($ millions)
2017 NOA =Answer
($ millions)
(c) Compute and disaggregate 3M’s RNOA into net operating profit
margin (NOPM) and net operating asset turnover (NOAT) for 2018.
Demonstrate that RNOA = NOPM...
Use the following financial statements for Lake of Egypt Marina, Inc. 2018 2017 $ 48 $ 50 55 44 Assets Current assets: Cash and marketable securities Accounts receivable Inventory Total Fixed assets: Gross plant and equipment Less: Depreciation 40 LAKE OF EGYPT MARINA, INC. Balance Sheet as of December 31, 2018 and 2017 (in millions of dollars) 2018 2017 Liabilities and Equity Current liabilities: $ 50 $ 56 Accrued wages and taxes 60 52 Accounts payable 205 Notes payable $315...
Compute, Disaggregate, and Interpret ROE and RNOA Graphical representations of the Ingersoll Rand 2018 income statement and average balance sheets (2017-2018) follow. Income Statement 2018 Average Balance Sheet 2017-2018 $54.4 $7,081.5 $4,077.7 $16,817.7 $15,668.2 $14,088.7 $6,830.6 $1,337.6 $1,226.4 Operating assets Nonoperating assets Operating expenses including tax on operating profit Operating liabilities Nonoperating liabilities Earning attributable to company shareholders Company shareholders' Noncontrolling interest Sales equity a. Compute the 2018 return on equity (ROE) and 2018 return on net operating assets (RNOA)....
Use the following financial statements for Lake of Egypt Marina, Inc. 2018 2017 LAKE OF EGYPT MARINA, INC. Balance Sheet as of December 31, 2018 and 2017 (in millions of dollars) 2018 2017 Liabilities and Equity Current liabilities: $ 50 $ 56 Accrued wages and taxes 60 52 Accounts payable 205 Notes payable $315 $204 Total $ 48 $ 50 55 Assets Current assets: Cash and marketable securities Accounts receivable Inventory Total Fixed assets: Gross plant and equipment Less: Depreciation...
Use the information from the Income Statements and
Balance Sheets to calculate the ratios in the image below for years
provided (Numbers 1-6):
Please provide examples of each equation used so that I
may create an excel file and replicate process.
Jan. 27, 2019 12 Months Ended Jan. 28, Jan. 29, 2018 2017 Jan. 31, 2016 $ 11,716 4,545 7,171 $ 9,714 3,892 5,822 $ 6,910 2,847 4,063 $ 5,010 2,199 2,811 1,797 2,376 991 1,463 663 815 3 2,612...
Calculate the following ratios based on Wendy's 2017 and 2018
financial statements and comment on the differences between FY 2017
and FY 2018.
Wendy's
FY 2017
FY 2018
Liquidity
Current Ratio:
Quick Ratio:
Comments on the companies' liquidity - what do the numbers
say?
Asset Management
Total Asset Turnover:
Avg Collection Period:
Comments on the companies' asset management - what do the numbers
say?
Debt Management
Total Debt to Total Assets:
Times Interest Earned:
Comments on the companies' debt management...
Hometown Supply Company reported the following information in its comparative financial statements for the fiscal year ended January 31, 2018: E: (Click the icon to view the data.) Read the requirements. Requirement 1. Compute net profit margin ratio (%) for the years ended January 31, 2018 and 2017. Did it improve or worsen in 2018? Identify the formula, then calculate profit margin for 2018 and 2017. (Round your answers to the nearest hundredth of a percent, X.XX%.) = Net profit...
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