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Compute, Disaggregate, and Interpret ROE and RNOA Headquartered in Calgary, Alberta, Husky Energy Inc. is a publicly traded, integrated energy company. Selected fiscal year balance sheet and income statement information for Husky Energy follow (Canadian $ millions). C$ millions 2018 2017 Revenues, net $36,716   Net income attributable to Husky 2,404   Pretax NNE 389   Operating assets 53,181 $49,866 Operating liabilities 16,276 15,708 Equity attributable to Husky shareholders 32,343 29,627 Tax rate 27.20%     a. Compute the 2018 return on equity (ROE) and the 2018 return on net operating assets (RNOA).   Numerator Denominator ROE   Answer Answer     Answer Answer       Numerator Denominator RNOA   Answer Answer     Answer Answer     b. Disaggregate RNOA into net operating profit margin (NOPM) and net operating asset turnover (NOAT).   Numerator Denominator NOPM   Answer Answer     Answer Answer       Numerator Denominator NOAT   Answer Answer     Answer Answer     c. Compute the percentage of RNOA to ROE, and compute Husky’s nonoperating return for 2018.   ROE RNOA RNOA/ROE   Answer Answer       ROE RNOA Nonoperating component of ROE   Answer Answer

Compute, Disaggregate, and Interpret ROE and RNOA Headquartered in Calgary, Alberta, Husky Energy Inc. is a publicly traded, integrated energy company. Selected fiscal year balance sheet and income statement information for Husky Energy follow (Canadian $ millions). C$ millions 2018 2017 Revenues, net $36,716   Net income attributable to Husky 2,404   Pretax NNE 389   Operating assets 53,181 $49,866 Operating liabilities 16,276 15,708 Equity attributable to Husky shareholders 32,343 29,627 Tax rate 27.20%     a. Compute the 2018 return on equity (ROE) and the 2018 return on net operating assets (RNOA).   Numerator Denominator ROE   Answer Answer     Answer Answer       Numerator Denominator RNOA   Answer Answer     Answer Answer     b. Disaggregate RNOA into net operating profit margin (NOPM) and net operating asset turnover (NOAT).   Numerator Denominator NOPM   Answer Answer     Answer Answer       Numerator Denominator NOAT   Answer Answer     Answer Answer     c. Compute the percentage of RNOA to ROE, and compute Husky’s nonoperating return for 2018.   ROE RNOA RNOA/ROE   Answer Answer       ROE RNOA Nonoperating component of ROE   Answer Answer

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Compute, Disaggregate, and Interpret ROE and RNOA

Headquartered in Calgary, Alberta, Husky Energy Inc. is a publicly traded, integrated energy company. Selected fiscal year balance sheet and income statement information for Husky Energy follow (Canadian $ millions).

C$ millions 2018 2017
Revenues, net $36,716  
Net income attributable to Husky 2,404  
Pretax NNE 389  
Operating assets 53,181 $49,866
Operating liabilities 16,276 15,708
Equity attributable to Husky shareholders 32,343 29,627
Tax rate 27.20%  

 

a. Compute the 2018 return on equity (ROE) and the 2018 return on net operating assets (RNOA).

  Numerator Denominator ROE
  Answer Answer  
  Answer Answer  

 

  Numerator Denominator RNOA
  Answer Answer  
  Answer Answer  

 

b. Disaggregate RNOA into net operating profit margin (NOPM) and net operating asset turnover (NOAT).

  Numerator Denominator NOPM
  Answer Answer  
  Answer Answer  

 

  Numerator Denominator NOAT
  Answer Answer  
  Answer Answer  

 

c. Compute the percentage of RNOA to ROE, and compute Husky’s nonoperating return for 2018.

  ROE RNOA RNOA/ROE
  Answer Answer  

 

  ROE RNOA Nonoperating component of ROE
  Answer Answer

 

 
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