Compute and Interpret RatiosSelected balance sheet and income statement information from Illinois Tool Works follows.$ millions2019 2018 2017Net operating profit after tax (NOPAT) $2,688 $2.792Net income2.597 2.640Total assetsEquity14,164 13,978 $15,7732,844 3.059 3.059Net operating profit after tax (NOA)Treasury stock8,337 8,894 9,48419.551 18,071 16,029a. Compute profitability measures: RNOA, ROA and ROE for 2019 and 2018 using the numbers as reported by the company.Note: Round answers to one decimal place (ex: 0.2345 = 23.5%).MetricRNOAROAROE20192018%%%b. Adjust equity and total assets for the amount of treasury stock.$ millionsAssets, restated $Equity, restated20192018S2017Using these restated numbers, recompute RNOA, ROA and ROE for both years.Note: Round answers to one decimal place (ex: 0.2345 = 23.5%).MetricRNOAROAROE20192018c. Which profitability measures (from part a or part b) better reflect the company's profit levels during the two years?Of the three measures, which one is least influenced by the company's stock repurchase activity?

b.Adjust equity and total assets for the amount of treasury stock.Equity, restated = Equity reported…

Answered: Compute and Interpret Ratios Selected…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Compute and Interpret Ratios Selected balance sheet and income statement information from Illinois Tool Works follows. $ millions 2019 2018 2017 Net operating profit after tax (NOPAT) $2,897 $3,009 Net income 2,798 2,845 Total assets 15,671 15,465 $17,451 Equity 3,147 3,384 3,384 Net operating profit after tax (NOA) 9,224 9,840 10,493 Treasury stock 21,070 19,475 17,274 a. Compute profitability measures: RNOA, ROA and ROE for 2019 and 2018 using the numbers as reported by the company.Note: Round answers to one decimal place (ex: 0.2345 = 23.5%). Metric 2019 2018 RNOA Answer Answer ROA Answer Answer ROE Answer Answer b. Adjust equity and total assets for the amount of treasury stock. $ millions 2019 2018 2017 Assets, restated Answer Answer Answer Equity, restated Answer Answer Answer Using these restated numbers, recompute RNOA, ROA and ROE for both years.Note: Round answers to one decimal…
Compute and Interpret Ratios Selected balance sheet and income statement information from Illinois Tool Works follows. $ millions 2019 2018 2017 Net operating profit after tax (NOPAT) $2,897 $3,009 Net income 2,798 2,845 Total assets 15,671 15,465 $17,451 Equity 3,147 3,384 3,384 Net operating profit after tax (NOA) 9,224 9,840 10,493 Treasury stock 21,070 19,475 17,274 b. Adjust equity and total assets for the amount of treasury stock. $ millions 2019 2018 2017 Assets, restated Answer Answer Answer Equity, restated Answer Answer Answer
Compute and Interpret Ratios Selected balance sheet and income statement information from Illinois Tool Works follows. $ millions 2019 2018 2017 Net operating profit after tax (NOPAT) $2,610 $2,711 Net income 2,521 2,563 Total assets 15,068 14,870 $16,780 Equity 3,026 3,254 3,254 Net operating profit after tax (NOA) 8,869 9,462 10,089 Treasury stock 18,982 17,545 15,562 a. Compute profitability measures: RNOA, ROA and ROE for 2019 and 2018 using the numbers as reported by the company. Note: Round answers to one decimal place (ex: 0.2345 = 23.5%). Metric 2019 2018 RNOA Answer Answer ROA Answer Answer ROE Answer Answer b. Adjust equity and total assets for the amount of treasury stock. $ millions 2019 2018 2017 Assets, restated Answer Answer Answer Equity, restated Answer Answer Answer Using these restated numbers, recompute RNOA, ROA and ROE for both years.Note: Round answers to one decimal…
Compute and Interpret Ratios Selected balance sheet and income statement information from Illinois Tool Works follows. $ millions 2019 2018 2017 Net operating profit after tax (NOPAT) $2,897 $3,009 Net income 2,798 2,845 Total assets 15,671 15,465 $17,451 Equity 3,147 3,384 3,384 Net operating profit after tax (NOA) 9,224 9,840 10,493 Treasury stock 21,070 19,475 17,274 Using these restated numbers, recompute RNOA, ROA and ROE for both years.Note: Round answers to one decimal place (ex: 0.2345 = 23.5%). Metric 2019 2018 RNOA Answer Answer ROA Answer Answer ROE Answer Answer
K McDaniel and Associates, Inc. reported the following amounts on its 2024 income statement: Year Ended December 31, 2024 Net income Income tax expense Interest expense $ 22,950 6,600 3,000 What was McDaniel's times-interest-earned ratio for 2024? OA. 7.65 OB. 10.85 OC. 9.85 OD. 8.65 point(s) possible ...
Compute and Interpret Ratios Selected balance sheet and income statement information from Illinois Tool Works follows. $ millions 2019 2018 2017 Net operating profit after tax (NOPAT) $2,349 $2,440 Net income 2,269 2,307 Total assets 14,315 14,127 $15,941 Equity 2,875 3,091 3,091 Net operating profit after tax (NOA) 8,426 8,989 9,585 Treasury stock 17,084 15,791 14,006 a. Compute profitability measures: RNOA, ROA and ROE for 2019 and 2018 using the numbers as reported by the company. Note: Round answers to one decimal place (ex: 0.2345 = 23.5%). Metric 2019 2018 RNOA Answer Answer ROA Answer Answer ROE Answer Answer b. Adjust equity and total assets for the amount of treasury stock. $ millions 2019 2018 2017 Assets, restated Answer Answer Answer Equity, restated Answer Answer Answer Using these restated numbers, recompute RNOA, ROA and ROE for both years.Note: Round answers to one decimal…
Selected ratios formulars Unilever 2021 BOPP 2021 ROCE PBIT / net assets * 100 (32,424/39,406 *100 = - 82% 102,154 / 192,758 *100 =53% Net Assets Turnover Revenue / Net Assets 526,912 / 39,406 = 13 times 214,174 / 192,758 = 1 time Gross Profit Margin Gross profit / revenue *100 97,046 / 526,912 *100 18.4% 115,462 / 214,174 * 100 54% Net Profit Before Tax PBT / revenue * 100 (35,005) / 526,912* 100 = -6.6% 104,778 / 214,174* 100 =48.9% Current Ratio Current assets / current liabilities 214,665/341,171 = 0.5 139,104 / 30,368 = 4.5 Quick Ratio Current assets – inventory / current liabilities 214,665-91,627 /341,171 = 0.4 139,104 -13,248/ 30,368 = 4.1 Inventory Days Inventory / cost of sales * 365 days 91,627/ 429,866 *365 = 77 days 13,248 / 101,397 *365 = 47 days Receivable Days Receivables / cost of sales * 365 days 24,515 / 429,866 *365 =20 days 92,860 / 101,397 *365 =334 days Payable Days…
This year Last year 1050 Assets Cash 1530 Marketable securities Accounts receivable Inventories Total current assets 1810 1220 2050 1770 2900 2790 8290 6830 Gross fixed assets 29480 28090 Less: Accumulated depreciation 14680 13140 Net fixed assets 14800 14950 Total assets Liabilities and Stockholders' Equity 23090 21780 Accounts payable Notes payable Accruals 1560 1540 2760 2160 190 350 Total current liabilities 4510 4050 Long-term debt Common stock Retained earnings Total stockholders' equity 5220 4970 9950 9950 3410 2810 13360 12760 Total liabilities and stockholders' equity 23090 21780
Use the following information to answer this question. Windswept, Incorporated 2022 Income Statement (in millions) Het sales Cost of goods sold Depreciation Earnings before interest and taxes Interest paid Taxable income Taxes Net income Cash Accounts receivable Inventory Total Net fixed assets Total assets 2021 What is the equity multiplier for 20227 $11,100 8,050 430 $ 2,620 104 $2,516 881 $ 1,635 Windswept, 2921 and 2022 Balance Sheets. (in millions) 2022 $300 1,150 1,050 2,060 1,775 $ 3,510 $3,155 3,520 4,120 $7,030 $7,275 $ 330 porated Accounts payable Long-term debt Common stock Retained earnings Total liabilities & equity 2021 $1,870 1,090 3,400 670 2022 $1,932 1,373 3,050 920 $7,030 $7,275.
Module pute Net Operating Profit after Tax Refer to the balance sheet information below for Home Depot. Feb. 3, 2019 Jan. 28, 2018 $35,891 $34,794 1,511 3,056 $37,402 $37,850 $14,177 $13,640 24,822 22,974 $38,999 $36,614 Operating assets Nonoperating assets Total assets $ millions Operating liabilities Nonoperating liabilities Total liabilities Net sales Operating expense before tax Net operating profit before tax (NOPBT) Other expense Income before tax Tax expense Net income Assume a statutory tax rate of 22%. a. Compute NOPAT for the year ended Feb. 3, 2019 using the formula: NOPAT = Net income + NNE Net income NNE NOPAT $ 9,453 $ $ $91,973 78,772 13,201 828 12,373 2,920 $9,453 7,361 * $ 16814 b. Compute NOPAT for the year ended Feb. 3, 2019 using the formula: NOPAT = NOPBT - Tax on operating profit NOPBT Tax on operating profit 7,361 * $ 10,296.78 x $ NOPAT -2936
Compute and Interpret Ratios Selected balance sheet and income statement information from Illinois Tool Works follows. $ millions 2019 2018 2017 Net operating profit after tax (NOPAT) $2,610 $2,711 Net income 2,521 2,563 Total assets 15,068 14,870 $16,780 Equity 3,026 3,254 3,254 Net operating profit after tax (NOA) 8,869 9,462 10,089 Treasury stock 18,982 17,545 15,562 a. Compute profitability measures: RNOA, ROA and ROE for 2019 and 2018 using the numbers as reported by the company. Note: Round answers to one decimal place (ex: 0.2345 = 23.5%). Metric 2019 2018 RNOA Answer Answer ROA Answer Answer ROE Answer Answer b. Adjust equity and total assets for the amount of treasury stock. $ millions 2019 2018 2017 Assets, restated Answer Answer Answer Equity, restated Answer Answer Answer
Following are forecasts of sales, net operating profit after tax (NOPAT), and net operating assets (NOA) as of December 31, 2018, for Humana. Reported Horizon Period $ millions 2018 2019 2020 2021 2022 TerminalPeriod Sales $56,912 $57,766 $58,632 $59,512 $60,404 $61,008 NOPAT 2,492 2,542 2,580 2,619 2,658 2,684 NOA 4,032 4,097 4,158 4,221 4,284 4,327 Answer the following requirements assuming a discount rate (WACC) of 7.8%, a terminal period growth rate of 1%, common shares outstanding of 135.6 million, net nonoperating obligations (NNO) of $(6,129) million, which is negative because Humana’s nonoperating assets exceed its nonoperating liabilities, and no noncontrolling interest (NCI) on the balance sheet. (a) Estimate the value of a share of common stock using the residual operating income (ROPI) model as of December 31, 2018. Instructions: Round all answers to the nearest whole number, except for discount factors, shares outstanding (do not round), and…

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