Identifying and Computing Net Operating Assets (NOA) and Net Nonoperating Obligations (NNO) Following are the balance sheets and statement of earnings for Home Depot Inc. for fiscal year ended February 3, 2019, which the company labels fiscal year 2018. THE HOME DEPOT INC. Consolidated Balance Sheets February 3, January 28, $ millions, except par value 2019 2018 Assets Current assets Cash and cash equivalents $1,778 $3,595 Receivables, net 1,936 1,952 Merchandise inventories 13,925 12,748 Other current assets 890 638 Total current assets 18,529 18,933 Net property and equipment 22,375 22,075 Goodwill 2,252 2,275 Other assets 847 1,246 Total assets $44,003 $44,529 THE HOME DEPOT INC. Consolidated Balance Sheets February 3, January 28, $ millions, except par value 2019 2018 Liabilities and Stockholders’ Equity Current liabilities Short-term debt $1,339 $1,559 Accounts payable 7,755 7,244 Accrued salaries and related expenses 1,506 1,640 Sales taxes payable 656 520 Deferred revenue 1,782 1,805 Income taxes payable 11 54 Current installments of long-term debt 1,056 1,202 Other accrued expenses 2,611 2,170 Total current liabilities 16,716 16,194 Long-term debt, excluding current installments 26,807 24,267 Deferred income taxes 491 440 Other long-term liabilities 1,867 2,174 Total liabilities 45,881 43,075 Common stock, par value $0.05; authorized: 10,000 shares; issued: 1,782 at February 3, 2019 and 1,780 shares at January 28, 2018; outstanding: 1,105 shares at February 3, 2019 and 1,158 shares at January 28, 2018 89 89 Paid-in capital 10,578 10,192 Retained earnings 46,423 39,935 Accumulated other comprehensive loss (772) (566) Treasury stock, at cost, 677 shares at February 3, 2019 and 622 shares at January 28, 2018 (58,196) (48,196) Total stockholders’ (deficit) equity (1,878) 1,454 Total liabilities and stockholders’ equity $44,003 $44,529 THE HOME DEPOT INC. Consolidated Statements of Earnings February 3, January 28, For Fiscal Year Ended ($ millions) 2019 2018 Net Sales $108,203 $100,904 Cost of sales 71,043 66,548 Gross profit 37,160 34,356 Operating expenses Selling, general and administrative 19,513 17,864 Depreciation and amortization 1,870 1,811 Impairment loss 247 0 Total operating expenses 21,630 19,675 Operating income 15,530 14,681 Interest and other (income) expense: Interest and investment income (93) (74) Interest expense 1,051 1,057 Other 16 0 Interest and other, net 974 983 Earnings before provision for income taxes 14,556 13,698 Provision for income taxes 3,435 5,068 Net earnings $11,121 $8,630 a. Compute net operating assets (NOA) and net nonoperating obligations (NNO) for the fiscal year ended February 3, 2019. NOA: $Answer NNO: $Answer b. For the fiscal year ended February 3, 2019, show that: NOA = NNO + Stockholders’ equity. NOA = NNO + Stockholders' equity Answer = Answer + Answer c. Compute net operating profit after tax (NOPAT) for the year ended February 3, 2019. Assume a federal and state combined statutory tax rate of 22%. Also, consider the Impairment loss of $247 million before tax ( $193 million after tax) to be a nonpersistent item. Exclude the after-tax amount from your NOPAT calculation. Note: Round your answer to the nearest whole dollar. NOPAT: $Answer

Identifying and Computing Net Operating Assets (NOA) and Net Nonoperating Obligations (NNO) Following are the balance sheets and statement of earnings for Home Depot Inc. for fiscal year ended February 3, 2019, which the company labels fiscal year 2018. THE HOME DEPOT INC. Consolidated Balance Sheets February 3, January 28, $ millions, except par value 2019 2018 Assets Current assets Cash and cash equivalents $1,778 $3,595 Receivables, net 1,936 1,952 Merchandise inventories 13,925 12,748 Other current assets 890 638 Total current assets 18,529 18,933 Net property and equipment 22,375 22,075 Goodwill 2,252 2,275 Other assets 847 1,246 Total assets $44,003 $44,529 THE HOME DEPOT INC. Consolidated Balance Sheets February 3, January 28, $ millions, except par value 2019 2018 Liabilities and Stockholders’ Equity Current liabilities Short-term debt $1,339 $1,559 Accounts payable 7,755 7,244 Accrued salaries and related expenses 1,506 1,640 Sales taxes payable 656 520 Deferred revenue 1,782 1,805 Income taxes payable 11 54 Current installments of long-term debt 1,056 1,202 Other accrued expenses 2,611 2,170 Total current liabilities 16,716 16,194 Long-term debt, excluding current installments 26,807 24,267 Deferred income taxes 491 440 Other long-term liabilities 1,867 2,174 Total liabilities 45,881 43,075 Common stock, par value $0.05; authorized: 10,000 shares; issued: 1,782 at February 3, 2019 and 1,780 shares at January 28, 2018; outstanding: 1,105 shares at February 3, 2019 and 1,158 shares at January 28, 2018 89 89 Paid-in capital 10,578 10,192 Retained earnings 46,423 39,935 Accumulated other comprehensive loss (772) (566) Treasury stock, at cost, 677 shares at February 3, 2019 and 622 shares at January 28, 2018 (58,196) (48,196) Total stockholders’ (deficit) equity (1,878) 1,454 Total liabilities and stockholders’ equity $44,003 $44,529 THE HOME DEPOT INC. Consolidated Statements of Earnings February 3, January 28, For Fiscal Year Ended ($ millions) 2019 2018 Net Sales $108,203 $100,904 Cost of sales 71,043 66,548 Gross profit 37,160 34,356 Operating expenses Selling, general and administrative 19,513 17,864 Depreciation and amortization 1,870 1,811 Impairment loss 247 0 Total operating expenses 21,630 19,675 Operating income 15,530 14,681 Interest and other (income) expense: Interest and investment income (93) (74) Interest expense 1,051 1,057 Other 16 0 Interest and other, net 974 983 Earnings before provision for income taxes 14,556 13,698 Provision for income taxes 3,435 5,068 Net earnings $11,121 $8,630 a. Compute net operating assets (NOA) and net nonoperating obligations (NNO) for the fiscal year ended February 3, 2019. NOA: $Answer NNO: $Answer b. For the fiscal year ended February 3, 2019, show that: NOA = NNO + Stockholders’ equity. NOA = NNO + Stockholders' equity Answer = Answer + Answer c. Compute net operating profit after tax (NOPAT) for the year ended February 3, 2019. Assume a federal and state combined statutory tax rate of 22%. Also, consider the Impairment loss of $247 million before tax ( $193 million after tax) to be a nonpersistent item. Exclude the after-tax amount from your NOPAT calculation. Note: Round your answer to the nearest whole dollar. NOPAT: $Answer

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Identifying and Computing Net Operating Assets (NOA) and Net Nonoperating Obligations (NNO)
Following are the balance sheets and statement of earnings for Home Depot Inc. for fiscal year ended February 3, 2019, which the company labels fiscal year 2018.

THE HOME DEPOT INC.
Consolidated Balance Sheets
	February 3,	January 28,
$ millions, except par value	2019	2018
Assets
Current assets
Cash and cash equivalents	$1,778	$3,595
Receivables, net	1,936	1,952
Merchandise inventories	13,925	12,748
Other current assets	890	638
Total current assets	18,529	18,933
Net property and equipment	22,375	22,075
Goodwill	2,252	2,275
Other assets	847	1,246
Total assets	$44,003	$44,529

THE HOME DEPOT INC.
Consolidated Balance Sheets
	February 3,	January 28,
$ millions, except par value	2019	2018
Liabilities and Stockholders’ Equity
Current liabilities
Short-term debt	$1,339	$1,559
Accounts payable	7,755	7,244
Accrued salaries and related expenses	1,506	1,640
Sales taxes payable	656	520
Deferred revenue	1,782	1,805
Income taxes payable	11	54
Current installments of long-term debt	1,056	1,202
Other accrued expenses	2,611	2,170
Total current liabilities	16,716	16,194
Long-term debt, excluding current installments	26,807	24,267
Deferred income taxes	491	440
Other long-term liabilities	1,867	2,174
Total liabilities	45,881	43,075
Common stock, par value $0.05; authorized: 10,000 shares; issued: 1,782 at February 3, 2019 and 1,780 shares at January 28, 2018; outstanding: 1,105 shares at February 3, 2019 and 1,158 shares at January 28, 2018	89	89
Paid-in capital	10,578	10,192
Retained earnings	46,423	39,935
Accumulated other comprehensive loss	(772)	(566)
Treasury stock, at cost, 677 shares at February 3, 2019 and 622 shares at January 28, 2018	(58,196)	(48,196)
Total stockholders’ (deficit) equity	(1,878)	1,454
Total liabilities and stockholders’ equity	$44,003	$44,529

THE HOME DEPOT INC.
Consolidated Statements of Earnings
	February 3,	January 28,
For Fiscal Year Ended ($ millions)	2019	2018
Net Sales	$108,203	$100,904
Cost of sales	71,043	66,548
Gross profit	37,160	34,356
Operating expenses
Selling, general and administrative	19,513	17,864
Depreciation and amortization	1,870	1,811
Impairment loss	247	0
Total operating expenses	21,630	19,675
Operating income	15,530	14,681
Interest and other (income) expense:
Interest and investment income	(93)	(74)
Interest expense	1,051	1,057
Other	16	0
Interest and other, net	974	983
Earnings before provision for income taxes	14,556	13,698
Provision for income taxes	3,435	5,068
Net earnings	$11,121	$8,630

a. Compute net operating assets (NOA) and net nonoperating obligations (NNO) for the fiscal year ended February 3, 2019.
NOA: $Answer

NNO: $Answer

b. For the fiscal year ended February 3, 2019, show that: NOA = NNO + Stockholders’ equity.

NOA	=	NNO	+	Stockholders' equity
Answer	=	Answer	+	Answer

c. Compute net operating profit after tax (NOPAT) for the year ended February 3, 2019. Assume a federal and state combined statutory tax rate of 22%. Also, consider the Impairment loss of $247 million before tax ( $193 million after tax) to be a nonpersistent item. Exclude the after-tax amount from your NOPAT calculation.
Note: Round your answer to the nearest whole dollar.
NOPAT: $Answer

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