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%).
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%).
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 |
|---|---|---|---|
| $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 |
| 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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