Selected balance sheet and income statement information from Illinois Tool works follows. $ millions Net operating profit after tax (NOPAT) $2,897 $3,009 Net income 2,798 2,845 Total assets 15,671 15,465 $17,451 3,147 3,384 3,384 9,224 9,840 10,493 21,070 19,475 17,274 Equity Net operating profit after tax (NOA) Treasury stock a. Compute profitability measures: RNOA, ROA and ROE for 2019 and 2018 using the numbers as reported by the company. Note: Round answers to one decimal place (ex: 0.2345= 23.5%). Metric RNOA ROA ROE 2019 30.4 % Metric RNOA ROA ROE 17.9% ✓ 88.91 % * 2018 2019 2019 2018 2017 29.6 % b. Adjust equity and total assets for the amount of treasury stock. $ millions 2019 2018 Assets, restated $ 36,741 $ 34,940 $ Equity, restated 24,217 $ 22,859 $ 30.4 % 8.08% * 11.89% ✔ 18.28 % * 84.1 %✔ Using these restated numbers, recompute RNOA, ROA and ROE for both years. Note: Round answers to one decimal place (ex: 0.2345 = 23.5%). 2018 2017 29.6% 8.64% * 13.08% ✓ 34,725 20,658

Selected balance sheet and income statement information from Illinois Tool works follows. $ millions Net operating profit after tax (NOPAT) $2,897 $3,009 Net income 2,798 2,845 Total assets 15,671 15,465 $17,451 3,147 3,384 3,384 9,224 9,840 10,493 21,070 19,475 17,274 Equity Net operating profit after tax (NOA) Treasury stock a. Compute profitability measures: RNOA, ROA and ROE for 2019 and 2018 using the numbers as reported by the company. Note: Round answers to one decimal place (ex: 0.2345= 23.5%). Metric RNOA ROA ROE 2019 30.4 % Metric RNOA ROA ROE 17.9% ✓ 88.91 % * 2018 2019 2019 2018 2017 29.6 % b. Adjust equity and total assets for the amount of treasury stock. $ millions 2019 2018 Assets, restated $ 36,741 $ 34,940 $ Equity, restated 24,217 $ 22,859 $ 30.4 % 8.08% * 11.89% ✔ 18.28 % * 84.1 %✔ Using these restated numbers, recompute RNOA, ROA and ROE for both years. Note: Round answers to one decimal place (ex: 0.2345 = 23.5%). 2018 2017 29.6% 8.64% * 13.08% ✓ 34,725 20,658

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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