![genyjoannerubiera](/avatars/23154.jpg)
genyjoannerubiera
11.02.2021 •
Business
Selected balance sheet and income statement information from Abbott Laboratories for 2018 follows ($ millions).
Net income $2,368
Net income attributable to Company shareholders 2,368
Net operating profit after tax (NOPAT) 2,940
Net nonoperating expense (NNE) 572
Average net operating assets (NOA) 48,222
Average net nonoperating obligations (NNO) 17,312
Average total equity 30,910
Average equity attributable to Company shareholders 30,711
Compute the following measures a through h.
a. Return on equity = (Net income attributable to Company shareholders/Average equity attributable to Company shareholders)
Note: Round percentage to one decimal place (for example, enter 6.7% for 6.6555%).
Answer
%
b. RNOA = NOPAT/Average NOA
Note: Round percentage to one decimal place (for example, enter 6.7% for 6.6555%).
Answer%
c. Nonoperating return = ROE − RNOA
Note: Round percentage to one decimal place (for example, enter 6.7% for 6.6555%).
Answer%
d. NNEP = NNE/Average NNO
Note: Round percentage to one decimal place (for example, enter 6.7% for 6.6555%).
Answer%
e. Spread = RNOA − NNEP
Note: Round percentage to one decimal place (for example, enter 6.7% for 6.6555%).
Answer%
f. FLEV = Average NNO/Average total equity
Note: Round amount to two decimal places (for example, enter 6.78 for 6.77555).
Answer
g. NCI ratio = (Net income attributable to Company shareholders/Net income)/(Average equity attributable to Company shareholders/Average total equity)
Note: Round amount to two decimal places (for example, enter 6.78 for 6.77555).
Answer
h. ROE = (RNOA + (Spread × FLEV)) × NCI ratio
Note: Round percentage to one decimal place (for example, enter 6.7% for 6.6555%).
Answer%
Solved
Show answers
More tips
- W Work and Career What is the Most In-Demand Profession in the Modern World?...
- A Auto and Moto How Can Parking Sensors Help Drivers?...
- H Health and Medicine What is the Normal Blood Sugar Level in a Healthy Person?...
- F Food and Cooking Red Caviar: How to Choose the Best?...
- C Computers and Internet Clearing Cache: How to Speed Up Your Browser...
- S Style and Beauty How are artificial nails removed?...
- S Style and Beauty Secrets of Tying a Pareo: 5 Ways...
- F Food and Cooking Everything You Need to Know About Pasta...
Answers on questions: Business
- B Business Make a list of information areas that the individuals who join foreign employment should know or understand....
- B Business In each of the following examples, name the factor that affects demand and describe its impact on your demand for a new cell phone. a. You hear a rumor that a new and improved model...
- B Business The Skunk Works home page describes this team best: What do the world’s first stealth aircraft, the world’s most advanced fighters, and the world’s fastest manned aircraft have in...
- B Business The owner of a bicycle repair shop forecasts revenues of $160,000 a year. Variable costs will be $50,000, and rental costs for the shop are $30,000 a year. Depreciation on the repair...
- B Business What is the marginal product? (a.)amount of input used in the coat of production (b.)increase in input added by the last unit output (c.)total change in output (d.)increase in output...
- B Business Amount issued $400 million Offered Issued at a price of 101.50% plus accrued interest (proceeds to company 101.300%) through First Boston Corporation. Interest 9.25% per annum, payable...
- B Business Efficiently managing the purchasing cycle is important because A. once established, it will require few changes. B. the needs of most businesses stay constant over the course of a...
- H Health You are cold, VERY cold! Your body responds by: -Shivering - Muscles contract and relax repeatedly, generating heat by friction and from metabolic reactions, -Glands secrete adrenaline...
- E English How would you describe Henry s character in The chrysanthemums...
- E English Read the excerpt from The People Could Fly So the alligators) all be quiet. Until the fire flare real high and close. Sparks flyin, they swinge all over them gators bare, white skins....
Ответ:
a. Return on equity = 7.7%
b. RNOA = 6.1%
c. Nonoperating return = 1.6%
d. NNEP = 3.3%
e. Spread = 2.8%
f. FLEV = 56.01%
g. NCI ratio = 1.01
h. ROE = 7.7%
Explanation:
a. Return on equity = (Net income attributable to Company shareholders/Average equity attributable to Company shareholders)
Return on equity = $2,368 / $30,711 = 0.0771059229592003
To convert to percentage, we multiply by 100 as follows:
Return on equity = 0.0771059229592003 * 100 = 7.71059229592003%
Rounding percentage to one decimal place, we have:
Return on equity = 7.7%
b. RNOA = NOPAT/Average NOA
RNOA = Return on net operating assets = $2,940 / $48,222 = 0.0609680228941147
To convert to percentage, we multiply by 100 as follows:
RNOA = 0.0609680228941147 * 100 = 6.09680228941147%
Rounding percentage to one decimal place, we have:
RNOA = 6.1%
c. Nonoperating return = ROE − RNOA
Nonoperating return = Return on equity (ROE) - RNOA = 7.7% - 6.1% = 1.6%
d. NNEP = NNE/Average NNO
NNEP = Net non-operating expense percent = $572 / $17,312 = 0.0330406654343808
To convert to percentage, we multiply by 100 as follows:
NNEP = 0.0330406654343808 * 100 = 3.30406654343808%
Rounding percentage to one decimal place, we have:
NNEP = 3.3%
e. Spread = RNOA − NNEP
Spread = 6.1% - 3.3% = 2.8%
f. FLEV = Average NNO/Average total equity
FLEV = Financial leverage = $17,312 / $30,910 = 0.560077644775154
To convert to percentage, we multiply by 100 as follows:
FLEV = 0.560077644775154 * 100 = 56.0077644775154%
Rounding percentage to two decimal place, we have:
FLEV = 56.01%
g. NCI ratio = (Net income attributable to Company shareholders/Net income)/(Average equity attributable to Company shareholders/Average total equity)
NCI ratio = ($2,368 / $2,368) / ($30,711 / $30,910) = 1 / 0.993561954060175 = 1.00647976295139
Rounding the amount to two decimal places, we have:
NCI ratio = 1.01
h. ROE = (RNOA + (Spread × FLEV)) × NCI ratio
ROE = (6.1% + (2.8% * 56.01%)) * 1.01 = 0.077449628
To convert to percentage, we multiply by 100 as follows:
ROE = 0.077449628 * 100 = 7.7449628%
Rounding percentage to one decimal place, we have:
ROE = 7.7%
Ответ:
Hello there sir or maam