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    NNO, NOPAT, NOA, RNOA, NOPM, NOAT, NOR, ROE Calculations

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    Analysis and Interpretation of Profitability
    Balance sheets and income statements for Nordstrom, Inc. follow. Refer to these financial statements to answer the requirements.
    NORDSTROM, INC.
    Consolidated Statements of Earnings
    For Fiscal Years Ended ($ millions) 2010 2009 2008 (numbers listed underneath by order)
    Sales $ 8,258 $ 8,272 $ 8,828
    Credit card revenues 369 301 252
    Total revenues 8,627 8,573 9,080
    Cost of sales and related buying and occupancy costs (5,328) (5,417) (5,526)
    Selling, general and administrative expenses
    Retail (2,109) (2,103) (2,130)
    Credit (356) (274) (177)
    Earnings before interest and income taxes 834 779 1,247
    Net interest expense (138) (131) (74)
    Earnings before income taxes 696 648 1,173
    Income tax expense (255) (247) (458)
    Net earnings $ 441 $ 401 $ 715
    NORDSTROM, INC.
    Consolidated Balance Sheets
    ($ millions) January 30, 2010 January 31, 2009 (numbers listed underneath by order)
    Assets
    Current Assets
    Cash and cash equivalents $ 795 $ 72
    Accounts receivable, net 2,035 1,942
    Merchandise inventories 898 900
    Current deferred tax assets, net 238 210
    Prepaid expenses and other 88 93
    Total current assets 4,054 3,217
    Land, buildings and equipment, net 2,242 2,221
    Goodwill 53 53
    Other assets 230 170
    Total assets $ 6,579 $ 5,661
    Liabilities and Shareholders' Equity
    Current liabilities
    Accounts payable $ 726 $ 563
    Accrued salaries, wages and related benefits 336 214
    Other current liabilities 596 525
    Current portion of long-term debt 356 299
    Total current liabilities 2,014 1,601
    Long-term debt, net 2,257 2,214
    Deferred property incentives, net 469 435
    Other liabilities 267 201
    Shareholders' equity
    Common stock, no par value 1,066 997
    Retained earnings 525 223
    Accumulated other comprehensive income (loss) (19) (10)
    Total shareholders' equity 1,572 1,210
    Total liabilities and shareholders' equity $ 6,579 $ 5,661

    Please help answer
    (a) Compute net operating profit after tax (NOPAT) for 2010. Assume that the combined federal and statutory rate is: 37.0%. (Round your answer to the nearest whole number.)
    2010 NOPAT = $

    (b) Compute net operating assets (NOA) for 2010 and 2009.
    2010 NOA = $

    2009 NOA = $

    (c) Compute RNOA, net operating profit margin (NOPM), and net operating asset turnover (NOAT) for 2010. Do not use NOPM x NOAT to calculate RNOA. (Do not round until final answers. Round to two decimal places.)
    2010 RNOA = %
    2010 NOPM = %
    2010 NOAT =

    (d) Compute net operating obligations (NNO) for 2010 and 2009.
    2010 NNO = $
    2009 NNO = $

    (e) Compute return on equity (ROE) for 2010. (Round your answers to two decimal places. Do not round until your final answer.)
    2010 ROE = %

    (f) Infer the nonoperating return component of ROE for 2010. (Use answers from above to calculate. Round your answer to two decimal places.)
    2010 nonoperating return = %

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    https://brainmass.com/business/accounting/nno-nopat-noa-rnoa-nopm-noat-nor-roe-calculations-597085

    Solution Preview

    a) NOPAT = (1-Tax Rate) * EBIT

    NOPAT = (1-37%)*696 = 0.63*696 = $438.48 m

    b) NOA = Operating Assets - Operating Liabilities

    Operating Assets = (Total Assets - Cash ) & Operating Liabilities = Total Liabilities - short term notes - long term debt

    NOA 2010 = (6579 - 795) - ...

    Solution Summary

    The solution computes Non Operating Obiligations, NOPAT, Net Operating Assets, Return on NOA, Net operating Margin, NOAT, Non operating return of ROE, return on Equity (ROE)

    $2.19