Nucor Corporation produces steel and steel products at its eight mills and is a major recycler of scrap metal. The following data relate to Nucor for four years. In 2017, Nucor’s net income was higher by $175.2 million because of a one-time effect of the Tax Cuts and Jobs Act. Nucor Corporation ($ in millions) 2015 2016 2017 2018 Total assets $14,327.0 $15,223.5 $15,841.3 $17,920.6 Common stockholders’ equity $7,849.9 $8,254.7 $9,084.8 $10,202.0 Total debt $4,388.5 $4,357.1 $3,795.1 $4,291.1 Sales $16,208.1 $20,252.4 $25,067.3 Net income 900.4 1,380.6 2,481.1 Interest expense 169.2 173.6 135.5 Assumed marginal income tax rate 0.37 0.37 0.23 Source: Nucor Form 10-Ks for 2015–2018. Required: In the following analyses, eliminate the one-time net income effect of the Tax Cuts and Jobs Act on 2017’s results. Calculate Nucor’s ROA for 2016, 2017, and 2018. Decompose ROA into operating profit margin and asset turnover components. Has Nucor’s profitability changed over the three years? Calculate the rate of return on common stockholders’ equity for 2016, 2017, and 2018.

Nucor Corporation produces steel and steel products at its eight mills and is a major recycler of scrap metal. The following data relate to Nucor for four years. In 2017, Nucor’s net income was higher by $175.2 million because of a one-time effect of the Tax Cuts and Jobs Act. Nucor Corporation ($ in millions) 2015 2016 2017 2018 Total assets $14,327.0 $15,223.5 $15,841.3 $17,920.6 Common stockholders’ equity $7,849.9 $8,254.7 $9,084.8 $10,202.0 Total debt $4,388.5 $4,357.1 $3,795.1 $4,291.1 Sales $16,208.1 $20,252.4 $25,067.3 Net income 900.4 1,380.6 2,481.1 Interest expense 169.2 173.6 135.5 Assumed marginal income tax rate 0.37 0.37 0.23 Source: Nucor Form 10-Ks for 2015–2018. Required: In the following analyses, eliminate the one-time net income effect of the Tax Cuts and Jobs Act on 2017’s results. Calculate Nucor’s ROA for 2016, 2017, and 2018. Decompose ROA into operating profit margin and asset turnover components. Has Nucor’s profitability changed over the three years? Calculate the rate of return on common stockholders’ equity for 2016, 2017, and 2018.

Financial Accounting Intro Concepts Meth/Uses

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ISBN:9781285595047

Author:Weil

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Chapter10: Long-lived Tangible And Intangible Assets

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Nucor Corporation produces steel and steel products at its eight mills and is a major recycler of scrap metal. The following data relate to Nucor for four years. In 2017, Nucor's net income was higher by $175.2 million because of a one-time effect of the Tax Cuts and Jobs Act. Nucor Corporation ($ in millions) 2015 2016 2017 2018 $14,327.0 7,849.9 4,388.5 $15,841.3 9,084.8 3,795.1 20,252.4 1,380.6 Total assets $15,223.5 8,254.7 4,357.1 16,208.1 $17,920.6 10,202.0 4,291.1 25,067.3 Common stockholders' equity Total debt Sales Net income 900.4 2,481.1 Interest expense 169.2 173.6 135.5 Assumed marginal income tax rate 0.37 0.37 0.23 Source: Nucor Form 10-Ks for 2015-2018. Required: In the following analyses, eliminate the one-time net income effect of the Tax Cuts and Jobs Act on 2017's results. 1. Calculate Nucor's ROA for 2016, 2017, and 2018. 2. Decompose ROA into operating profit margin and asset turnover components. 3. Has Nucor's profitability changed over the three years? 4.…
Nucor Corporation produces steel and steel products at its eight mills and is a major recycler of scrap metal. The following data relate to Nucor for four years. In 2017, Nucor's net Income was higher by $175.2 million because of a one-time effect of the Tax Cuts and Jobs Act. Nucor Corporation ($ in millions) Total assets Common stockholders' equity Total debt Sales Net income Interest expense Assumed marginal income tax rate Source: Nucor Form 10-Ks for 2015-2018. Required: In the following analyses, eliminate the one-time net Income effect of the Tax Cuts and Jobs Act on 2017's results. 1. Calculate Nucor's ROA for 2016, 2017, and 2018. 2. Decompose ROA Into operating profit margin and asset turnover components. 3. Has Nucor's profitability changed over the three years? 4. Calculate the rate of return on common stockholders' equity for 2016, 2017, and 2018. Complete this question by entering your answers in the tabs below. ROA Required 2 Required 3 2016 Required 1 Calculate Nucor's…
N2.
Doral Division of Resorts International reported net operating profit after taxes totaling $120,000 in 2017. The cost of capital is 10.5 percent and the invested capital is $560,000. R&D incurred in 2017 was $100,000. The company's policy is to amortize intangible assets over 4 years. The income tax rate is 30 percent. How much is the company's economic value added for 2017? a. $75,825 b. $105,825 c. $825 d. $70,825 Do not copy from Chegg and give complete answer with explanation
Redline Publishers, Inc. produces various manuals ranging from computer software instructional booklets tomanuals explaining the installation and use of large pieces of industrial equipment. At the end of 2018, the company’s balance sheet reported total assets of $62 million and total liabilities of $40 million. The income statementfor 2018 reported net income of $1.1 million, which represents an approximate 3% increase from the prior year.The company’s effective income tax rate is 30%.Near the end of 2018, a variety of expenditures were made to overhaul the company’s manufacturing equipment. None of these expenditures exceeded $750, the materiality threshold the company has set for the capitalization of any such expenditure. Even though the overhauls extended the service life of the equipment, theexpenditures were expensed, not capitalized.John Henderson, the company’s controller, is worried about the treatment of the overhaul expenditures. Eventhough no individual expenditure…
A domestic enterprise in 2009 taxable income of $10 million, it has branches in A and B.The taxable income of the branch of State A is $7 million, of which the income from production and operation is $6 million (tax rate is 40%) and the income from interest is $1 million (tax rate is 20%).The taxable income of the branch of State B is $3 million, of which the income from production and operation is $2 million (tax rate is 20%) and the income from interest is $1 million (tax rate is 11%).B country in 2008 there are 20,000 dollars of overseas income tax payable without deduction. Requirements: calculate the enterprise income tax payable by the enterprise in 2009 (summarize domestic and foreign income).
Redline Publishers, Inc. produces various manuals ranging from computer software instructional booklets to manuals explaining the installation and use of large pieces of industrial equipment. At the end of 2016, the company’s balance sheet reported total assets of $62 million and total liabilities of $40 million. The income statement for 2016 reported net income of $1.1 million, which represents an approximate 3% increase from the prior year. The company’s effective income tax rate is 30%. Near the end of 2016, a variety of expenditures were made to overhaul the company’s manufacturing equipment. None of these expenditures exceeded $750, the materiality threshold the company has set for the capitalization of any such expenditure. Even though the overhauls extended the service life of the equipment, the expenditures were expensed, not capitalized. John Henderson, the company’s controller, is worried about the treatment of the overhaul expenditures. Even though no individual expenditure…
The table below shows a condensed income statement and balance sheet for Androscoggin Copper's Rumford smelting plant (figures in S millions). Assume the cost of capital is 9% Income Statement for 2018 Revenue Raw materials cost Operating cost Depreciation Pretax income Tax at 215 Net income EVA $.57.06 18.66 21.05 4.46 $.12.87 2.70 5:10.17 Net working capital 5:16 million Assets, December 31, 2018 Investment in plant and equipment Less accumulated depreciation Net plant and equipment Total assets Answer is complete and correct. a. Calculate the plant's EVA (Enter your answer in millions rounded to 2 decimal places.) $ 7,04 69.73 21.05 $48.68 $55.72
Nighthawk Steel, a manufacturer of specialized tools, has $4,700,000 in assets. Temporary current assets Permanent current assets Capital assets $1,400,000 1,520,000 1,780,000 Total assets $4,700,000 Short-term rates are 10 percent. Long-term rates are 15 percent. (Note that long-term rates imply a return to any equity). Earnings before interest and taxes are $1,000,000. The tax rate is 20 percent. If long-term financing is perfectly matched (hedged) with long-term asset needs, and the same is true of short-term financing, what will earnings after taxes be? For an example of perfectly hedged plans, see Figure 6-8. Earnings after taxes
Rowen, Inc. had pre-tax accounting income of $1,672,000 and a tax rate of 40% in 2015, its first year of operations. During 2015 the company had the following transactions: Received rent from Jane, Co. for 2016 $64,000 Municipal bond income $80,000 Depreciation for tax purposes in excess of book depreciation $40,000 Installment sales revenue to be collected in 2016 $108,000 6. At the end of 2015, which of the following deferred tax accounts and balances is reported on Rowen, Inc.’s balance sheet? Account Balance a. Deferred tax asset $32,000 b. Deferred tax liability $32,000 c. Deferred tax asset $59,200 d. Deferred tax liability $59,200
Houston pumps recently reported net income of $600000 and an interest expense of $238000. The company has total invested capital employees of $7.2 million a tax rate of 40% and after tax cost of capital of 10%. What is the companies EVA?
Acer Systems, a manufacturer of gaming consoles, has $5,520,000 in assets. Temporary current assets Permanent current assets Capital assets Total assets $1,340,000 1,840,000 2,340,000 $5,520,000 Short-term rates are 5 percent. Long-term rates are 7.5 percent. (Note that long-term rates imply a return Earnings before interest and taxes are $1,130,000. The tax rate is 25 percent. Assume the term structure a becomes inverted, with short-term rates going to 10 percent and long-term rates 5 percentage points lowe rates. If long-term financing is perfectly matched (hedged) with long-term asset needs, and the same is true of sh what will earnings be after taxes? For an example of perfectly hedged plans, see Figure 6-8. Earning after taxes $

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Nucor Corporation
($ in millions)	2015	2016	2017	2018
Total assets	$14,327.0	$15,223.5	$15,841.3	$17,920.6
Common stockholders’ equity	$7,849.9	$8,254.7	$9,084.8	$10,202.0
Total debt	$4,388.5	$4,357.1	$3,795.1	$4,291.1
Sales		$16,208.1	$20,252.4	$25,067.3
Net income		900.4	1,380.6	2,481.1
Interest expense		169.2	173.6	135.5
Assumed marginal income tax rate		0.37	0.37	0.23