5. 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 Operating expenses Operating carnings before financial services For the fiscal year ended 2018 2017 $3,430.4 $ 3,352.8 (1,720.8) (1,704.5) 1.709.6 1,648.3 (1,054.1) (1.053.7) 655.5 $94.6 240.3 (70.1) 170.2 Financial services revenue Financial services expenses Operating income from financial services Operating earnings Interest expense Other income (expense) -- net Earnings before income taxes and equity earnings Income tax expense Earnings before equity earnings Equity earnings, net of tax Net earnings Net earnings attributable to noncontrolling interests Net earnings attributable to Snap-on Incorporated 281.4 (82.7) 198.7 854.2 (52.2) (0.6) 801.4 (244.3) 557.1 764.8 (51.9) (2.4) 710.5 (221.2) 489.3 1.3 490.6 (11.9) $ 478.7 559.6 (13.2) S 546.4 SNAP-ON INCORPORATED Consolidated Balance Sheets (Amount in millions) Fiscal Year End 2018 2017 $ 92.8 562.5 $ 77.6 598.8 472.5 88.1 530.5 00 Cash and cash equivalents Trade and other accounts receivable - net Finance receivables - net Contract receivables - net Inventories - net Deferred income tax assets Prepaid expenses and other assets Total current assets Property and equipment - net Deferred income tax assets Long-term finance receivables - net Long-term contract receivables - net Goodwill Other intangibles.net Other assets Total assets 1165 1,884.0 425.2 72.8 497.8 109.9 106.3 1.898.7 413.5 106.3 772.7 266.6 790.1 195.0 44.0 4,486.9 286.7 895.5 184.6 39.9 4,723.2 18.4 148.3 52.1 91.0 64.4 296.3 Notes payable and current maturities of long-term debt Accounts payable Accrued benefits Accrued compensation Franchisee deposits Other accrued liabilities Total current liabilities Long-term debt Deferred income tax liabilities Retiree health care benefits Pension liabilities Other long-term liabilities Total liabilities 301.4 1709 52.8 89.8 66.7 3079 999.5 708.8 13.1 36.7 246.5 93.4 2,088.0 670.5 861.7 169.8 37.9 227.8 88.5 $ 2,056.2 Preferred stock Common stock Additional paid-in capital Retained earnings Accumulated other comprehensive income (loss) Treasury stock at cost Total shareholders' equity attributable to Snap-on Inc. Noncontrolling interests Total shareholders' equity Total liabilities and shareholders' equity 67.4 317.3 3,3849 (498.5) (653.9) 2,617.2 $ 67.4 296.3 2,986.9 (364.2) (573.7) 2,412.7 18.0 2.430.7 $4,486.9 18.0 2.635.2 $4,723.2 Required: a. Compute net operating profit after tax (NOPAT) for 2018 and 2017. Assume that combined federal and state statutory tax rates are 37% for fiscal 2018 and 2017. b. Compute net operating assets (NOA) for 2018 and 2017. c. Compute return on net operating assets (RNOA) for 2018 and 2017. Net operating assets are $3,011.7 million in 2016. 5. 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 Operating expenses Operating carnings before financial services For the fiscal year ended 2018 2017 $3,430.4 $ 3,352.8 (1,720.8) (1,704.5) 1.709.6 1,648.3 (1,054.1) (1.053.7) 655.5 $94.6 240.3 (70.1) 170.2 Financial services revenue Financial services expenses Operating income from financial services Operating earnings Interest expense Other income (expense) -- net Earnings before income taxes and equity earnings Income tax expense Earnings before equity earnings Equity earnings, net of tax Net earnings Net earnings attributable to noncontrolling interests Net earnings attributable to Snap-on Incorporated 281.4 (82.7) 198.7 854.2 (52.2) (0.6) 801.4 (244.3) 557.1 764.8 (51.9) (2.4) 710.5 (221.2) 489.3 1.3 490.6 (11.9) $ 478.7 559.6 (13.2) S 546.4 SNAP-ON INCORPORATED Consolidated Balance Sheets (Amount in millions) Fiscal Year End 2018 2017 $ 92.8 562.5 $ 77.6 598.8 472.5 88.1 530.5 00 Cash and cash equivalents Trade and other accounts receivable - net Finance receivables - net Contract receivables - net Inventories - net Deferred income tax assets Prepaid expenses and other assets Total current assets Property and equipment - net Deferred income tax assets Long-term finance receivables - net Long-term contract receivables - net Goodwill Other intangibles.net Other assets Total assets 1165 1,884.0 425.2 72.8 497.8 109.9 106.3 1.898.7 413.5 106.3 772.7 266.6 790.1 195.0 44.0 4,486.9 286.7 895.5 184.6 39.9 4,723.2 18.4 148.3 52.1 91.0 64.4 296.3 Notes payable and current maturities of long-term debt Accounts payable Accrued benefits Accrued compensation Franchisee deposits Other accrued liabilities Total current liabilities Long-term debt Deferred income tax liabilities Retiree health care benefits Pension liabilities Other long-term liabilities Total liabilities 301.4 1709 52.8 89.8 66.7 3079 999.5 708.8 13.1 36.7 246.5 93.4 2,088.0 670.5 861.7 169.8 37.9 227.8 88.5 $ 2,056.2 Preferred stock Common stock Additional paid-in capital Retained earnings Accumulated other comprehensive income (loss) Treasury stock at cost Total shareholders' equity attributable to Snap-on Inc. Noncontrolling interests Total shareholders' equity Total liabilities and shareholders' equity 67.4 317.3 3,3849 (498.5) (653.9) 2,617.2 $ 67.4 296.3 2,986.9 (364.2) (573.7) 2,412.7 18.0 2.430.7 $4,486.9 18.0 2.635.2 $4,723.2 Required: a. Compute net operating profit after tax (NOPAT) for 2018 and 2017. Assume that combined federal and state statutory tax rates are 37% for fiscal 2018 and 2017. b. Compute net operating assets (NOA) for 2018 and 2017. c. Compute return on net operating assets (RNOA) for 2018 and 2017. Net operating assets are $3,011.7 million in 2016