4. Income statements and balance sheets follow for Snap-On Incorporated. Refer to these financial statements to answer the requirements. Snap-On Incorporated Consolidated Statements of Earnings (Amounts in millions) Net sales. Cost of goods sold Gross profit For the fiscal year ended 2011 $ 2,854.2 (1.516.3) 2010 $ 2,619.2 1,337.9 (1.408.1) 1211.1 Operating expenses (953.7) (894.1) Operating earnings before financial services 384 2 317.0 Financial services revenue 124.3 62.3 Financial services expenses (514) (47.9) Operating income from financial services before arbitration settlement 72.9 14.4 Arbitration settlement 18.0 Operating income from financial services 90.9 144 Operating earnings 475.1 331.4 Interest expense (61.2) (54.8) Other income (expense) - net (1.0) 0.8 Earnings before income taxes and equity earnings 412.9 2774 Income tax expense (133.7) (87.6) Earnings before equity earnings 279.2 Equity earnings, net of tax Net earnings Net earnings attributable to noncontrolling interests Net earnings attributable to Snap-on Incorporated $ 276.3 4.6 283.8 189.8 3.2 193.0 (7.5) (6.5) $ 186.5 (Amounts in millions) Snap-On Incorporated Consolidated Balance Sheets Cash and cash equivalents Trade and other accounts receivable-net Finance receivables - net Contract receivables - net Inventories - net Fiscal Year End 2011 2010 $ 185.6 463.5 277.2 S 572.2 443.3 215.3 49.7 386.4 45.6 329.4 Inventories net 386.4 329.4 Deferred income tax assets 92.6 87.0 Prepaid expenses and other assets 75.7 72.7 Total current assets 1,530.7 1,765.5 Property and equipment - net 352.9 344.0 Deferred income tax assets 125.2 91.5 Long-term finance receivables - net 431.8 345.7 Long-term contract receivables - net 165.1 119.3 Goodwill 795.8 798.4 Other intangibles - net 188.3 192.8 Other assets 83.1 72.2 Total assets $3.672.9 $3,729.4 Notes payable and current maturities of long-term debt S 16.2 $ 216.0 Accounts payable 124.6 146.1 Accrued benefits Accrued compensation Franchisee deposits 48.8 45.0 91.0 86.7 47.3 40.4 Other accrued liabilities 255.9 346.9 Total current liabilities 583.8 881.1 Long-term debt 967.9 954.8 Deferred income tax liabilities 108.1 94.4 Retiree health care benefits 52.8 59.6 Pension liabilities 317.7 246.1 Other long-term liabilities 95.3 89.0 Total liabilities 2,125.6 2,325.0 Other long-term liabilities Total liabilities Preferred stock Common stock 95.3 2,125.6 89.0 2,325.0 67.3 67.3 Additional paid-in capital 181.4 169.2 Retained earnings 1,843.7 1,644.1 Accumulated other comprehensive income (loss) (174.6) (104.8) Treasury stock at cost (386.9) (387.3) Total shareholders' equity attributable to Snap-on Inc. 1,530.9 1,388.5 Noncontrolling interests 16.4 15.9 Total shareholders' equity 1,547.3 1,404.4 Total liabilities and shareholders' equity $ 3,672.9 $3,729.4 Required: a. Compute net operating profit after tax (NOPAT) for 2011 and 2010. Assume that combined federal and state statutory tax rates are 37.7% for fiscal 2011 and 37.5% for fiscal 2010. b. Compute net operating assets (NOA) for 2011 and 2010. c. Compute return on net operating assets (RNOA) for 2011 and 2010. Net operating assets are $1,673.0 million in 2009. d. Compute return on equity (ROE) for 2011 and 2010. (Stockholders' equity in 2009 is $1,290.0 million.) e. f. What is nonoperating return component of ROE for 2011 and 2010? Comment on the difference between ROE and RNOA. What inference do you draw from this comparison