$ 209 210 PART 2 BUSIN BUSINESS ANALYSIS AND VALUATION TOOLS select ized and adjusted balance sheet Standardized (E millions) on-current haunties (non-interest be 5.055 shareholders' equity Minority interest Non-current debt Deferred tax liability Other non-current liah Total non-current liabilities Current debt Trade payables Other current liabilities Total current liabilities 444 2522 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 2,073 & 1975 112 2,391 10,127 2,453 9418 Calculate Inditex's net operating profit after taxes, operating working capital, net.com and net assets in 2007 and 2008. (Use the effective tax rate us expenselpot before well NOPAT.) 2 Decompose Inditex's retum on equity in 2007 and 2008 using the traditional approach 3 Decompose Inditex's retum on equity in 2007 and 2008 using the alternative approach. What plains the ference between Inditex's return on assets and its operating return on assets? 4) Analyze the underlying drivers of the change in Inditex's retur on equity. What explains the decrease in retum on equity? How strongly does Inditex appear to be affected by the economic crisis of 2008? (In you answer, make sure to address issues of store productivity, cost control, pricing and leverage.) Problem 2 Ratio analysis and acquisitions of mortable GPS car navigation systems that it sells ac 6197 milli . Average tax rate. ber of clothing design, manufacturi d Massimo Dutti. At the end of o stores across 73 Swy Problem 1 ROE decomposition Index SA Is the Spain-based parent company y of a large . At the en subsidiaries. The company's brands include Zara, Pull&Bear, and macsimo ending on January 31, 2009 dial year 2008), the subsidiaries of Inditex operated 4.359 We making Inditex one of the three largest clothing retailers in the world. The following tables show the standardized and adjusted income statements and balance she the years anded January 31, 2007 and 2008. Operating lease obligations have been capitalized fase expense has been replaced with depreciation and interest expense. Following the proce ets for Index and the openie ocedure described Chapter 4: 2007 Standardized and adjusted income statement [Emillions) 2008 10.407 (4,493) (1.703) 1910) (1,168) 2,133 9,435 (4,086) (1,473) (803) (1,039) 2,033 Sales Cost of materials Personnel expense Depreciation and amortization Other operating income, net of other operating expense Operating profit Investment income Net interest expense Profit before taxes Tax expense Profit after taxes Minonity interest Net profit (84) 2,050 (455) 1,595 (72) 1,953 (474) 1,479 1,587 1,471 2008 2007 6,325 148 203 Standardized and adjusted balance sheet ( millions) Non-current tangible assets Non-current intangible assets Deferred tax asset Other non-current assets Total non-current assets Trade receivables Inventories Other current assets Cash and marketable securities Total current assets TOTAL ASSETS 188 6,000 139 133 165 6,437 464 1,007 6,863 585 1,055 158 1,466 3,264 10,127 45 1,466 2,982 9,418 Cepure genel M (continued) ewah Durigheid tyc h ock
