E3-41.Directly Compute Nonoperating Return with Noncontrolling Interest Selected balance sheet and income statement information from Abbott Laboratories for 201 8 follows

($ millions).

Net income . .. .. . ...... .. .. . ......... .. ...... . .

Net income attributable to Company shareholders . . .. .

Net operating profit after tax (NOPAT) . .. .. . ...... .. .

Net nonoperating expense (NNE) . . .. .... .. ..... . . .

Average net operating assets (NOA)

Average net nonoperating obligations (NNO) .... . . ... .

Average total equity .. .. . ... . .. . . .. .. .. ... . .. .. . .

Average equity attributable to Company shareholders . . .

Compute the following measures a through h.

$ 2,368 2,368 2,940 572 48,222 17,312 30,910 30,711

a. Return on equity= Net income attributable to Company shareholders/Average equity attributable to Company shareholders

b. RNOA = NOPAT/Average NOA

c. Nonoperating return = ROE - RNOA

d. NNEP = NNE/Average NNO

e. Spread= RNOA - NNEP f FLEV =Average NNO/Average total equity g. NCI ratio = (Net income attributable to Company shareholders/Net income)/(Average equity attributable to Company shareholders/Average total equity)

h. ROE = (RNOA + (Spread x FLEV)) x NCI ratio