Compute NOPAT Selected income statement information for 2018 is presented below for Home Depot Inc. and Lowe’s Companies Inc. Assume the statutory tax rate is 22%. Pretax Net Average Net Nonoperating Tax Operating Company ($ millions) Ticker Sales NOPBT Expense Expense Assets Home Depot HD $65,787 $9,442 $592 $2,088 $15,332 Lowe’s LOW 43,356 2,443 379 657 12,358 a. Compute the following measures for both companies. 1. NOPAT Company NOPAT Home Depot Answer Lowe's Answer 2. RNOA Note: 1. Select the appropriate numerator and denominator used to compute RNOA from the drop-down menu options. 2. Enter the numerator and denominator amounts to compute RNOA. Company Numerator Denominator RNOA Answer Answer Home Depot Answer Answer Lowe's Answer Answer 3. NOPM Note: 1. Select the appropriate numerator and denominator used to compute NOPM from the drop-down menu options. 2. Enter the numerator and denominator amounts to compute NOPM. Company Numerator Denominator NOPM Answer Answer Home Depot Answer Answer Lowe's Answer Answer 4. NOAT Note: 1. Select the appropriate numerator and denominator used to compute NOAT from the drop-down menu options. 2. Enter the numerator and denominator amounts to compute NOAT. Company Numerator Denominator NOAT Answer Answer Home Depot Answer Answer Lowe's Answer Answer b. Indicate which of these two companies: Indicate which of these two companies: Company 1. Is more profitable (in $s). Answer 2. Produces the higher profit margin (in %). Answer 3. Uses its NOA more efficiently. Answer 4. Produces the higher return on NOA. Answer

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Compute NOPAT

Selected income statement information for 2018 is presented below for Home Depot Inc. and Lowe’s Companies Inc. Assume the statutory tax rate is 22%.

				Pretax Net		Average Net
				Nonoperating	Tax	Operating
Company ($ millions)	Ticker	Sales	NOPBT	Expense	Expense	Assets
Home Depot	HD	$65,787	$9,442	$592	$2,088	$15,332
Lowe’s	LOW	43,356	2,443	379	657	12,358

a. Compute the following measures for both companies.

1. NOPAT

	Company	NOPAT
	Home Depot	Answer
	Lowe's	Answer

2. RNOA

Note: 1. Select the appropriate numerator and denominator used to compute RNOA from the drop-down menu options. 2. Enter the numerator and denominator amounts to compute RNOA.

Company	Numerator	Denominator
	Answer	Answer
Home Depot	Answer	Answer
Lowe's	Answer	Answer

3. NOPM

Note: 1. Select the appropriate numerator and denominator used to compute NOPM from the drop-down menu options. 2. Enter the numerator and denominator amounts to compute NOPM.

Company	Numerator	Denominator
	Answer	Answer
Home Depot	Answer	Answer
Lowe's	Answer	Answer

4. NOAT

Note: 1. Select the appropriate numerator and denominator used to compute NOAT from the drop-down menu options. 2. Enter the numerator and denominator amounts to compute NOAT.

Company	Numerator	Denominator
	Answer	Answer
Home Depot	Answer	Answer
Lowe's	Answer	Answer

b. Indicate which of these two companies:

Indicate which of these two companies:	Company
1. Is more profitable (in $s).	Answer
2. Produces the higher profit margin (in %).	Answer
3. Uses its NOA more efficiently.	Answer
4. Produces the higher return on NOA.	Answer