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. 1. 2016 2017 2018 ROA % % % 2. 2016 2017 2018 Operating profit margin % % % Asset turnover 3. Has Nucor’s profitability changed over the three years? _____ 4. 2016 2017 2018 Rate of return on common stockholders’ equity % % %
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. 1. 2016 2017 2018 ROA % % % 2. 2016 2017 2018 Operating profit margin % % % Asset turnover 3. Has Nucor’s profitability changed over the three years? _____ 4. 2016 2017 2018 Rate of return on common stockholders’ equity % % %
Chapter12: Balanced Scorecard And Other Performance Measures
Section: Chapter Questions
Problem 3PA: Macon Mills is a division of Bolin Products. Inc. During the most recent year, Macon had a net...
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Question
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 |
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.
| 1. | |||||||||||||
|
|
3. Has Nucor’s profitability changed over the three years? _____
| 4. | ||||||||||||
|
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