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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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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)

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) - ...

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