c. 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?→Check Compute and Interpret RatiosSelected balance sheet and income statement information from Illinois Tool Works follows.$ millionsNet operating profit after tax (NOPAT) $2,897 $3,009Net income2,798 2,845Total assets15,671 15,465 $17,4513,147 3,384 3,38410,4939,224 9,84021,070 19,47517,274EquityNet operating profit after tax (NOA)Treasury stocka. Compute profitability measures: RNOA, ROA and ROE for 2019 and 2018 using the numbers as reported by the company.Note: Round answers to one decimal place (ex: 0.2345 = 23.5%).2018MetricRNOAROAROE2019$ millionsAssets, restated $Equity, restatedMetricRNOAb. Adjust equity and total assets for the amount of treasury stock.201920182017ROAROE%%%2019%%%$$Using these restated numbers, recompute RNOA, ROA and ROE for both years.Note: Round answers to one decimal place (ex: 0.2345 = 23.5%).2018%%%2019 2018 2017%%%$$

Financial ratios are defined as measures to project the growth of an entity. Two or more variables…

Compute and Interpret Ratios Selected balance sheet and income statement information from Illinois Tool Works follows. $ millions 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 10,493 Net operating profit after tax (NOA) 9,224 9,840 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%). 2018 Metric RNOA ROA ROE 2019 $ millions Assets, restated $ Equity, restated % % % b. Adjust equity and total assets for the amount of treasury stock. 2019 2018 2017 Metric 2019 RNOA ROA ROE 2019 2018 2017 % % % $ $ % % % Using these restated numbers, recompute RNOA, ROA and ROE for both years. Note: Round answers to one decimal place (ex: 0.2345 = 23.5%). 2018 % % % $

Compute and Interpret Ratios Selected balance sheet and income statement information from Illinois Tool Works follows. $ millions 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 10,493 Net operating profit after tax (NOA) 9,224 9,840 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%). 2018 Metric RNOA ROA ROE 2019 $ millions Assets, restated $ Equity, restated % % % b. Adjust equity and total assets for the amount of treasury stock. 2019 2018 2017 Metric 2019 RNOA ROA ROE 2019 2018 2017 % % % $ $ % % % Using these restated numbers, recompute RNOA, ROA and ROE for both years. Note: Round answers to one decimal place (ex: 0.2345 = 23.5%). 2018 % % % $

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter15: Financial Statement Analysis

Section: Chapter Questions

Problem 19BEA

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Consider the following income statement: Sales Costs Depreciation Taxes Calculate the EBIT. EBIT $748,168 486,752 110,700 Net income 23% Calculate the net income.
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) $2,480 $2,575 Net income 2,395 2,435 Total assets 13,561 13,383 $15,102 Equity 2,723 2,929 2,929 Net operating profit after tax (NOA) 7,982 8,516 9,080 Treasury stock 18,033 16,668 14,784 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%). b. Adjust equity and total assets for the amount of treasury stock. Using these restated numbers, recompute RNOA, ROA and ROE for both years.Note: Round answers to one decimal place (ex: 0.2345 = 23.5%).
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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…
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