a. Compute net operating profit after tax (NOPAT) for 2015.Assume that the combined federal and state statutory tax rate is 37%.

b. Compute net operating assets (NOA) for 2015 and 2014.

c. Compute RNOA and disaggregate it into net operating profit margin (NOPM) and net operating asset turnover (NOAT) for 2015; confirm that RNOA NOPM NOAT. The median NOPM and NOAT for companies in the packaged food industry is 5% and 2.1, with a median RNOAof 10.5%. Comment on NOPM and NOAT estimates for Mondelez in comparison to industry medians

. d. Compute net nonoperating obligations (NNO) for 2015 and 2014. Confirm the relation: NOA NNO 1 Total equity

. e. Compute return on equity (ROE) for 2015.

f. Infer the nonoperating return component of ROE for 2015. 3. Comment on the difference between ROE and RNOA. What does this relation suggest about Mondelezs use of debt

3-59 Module 3 1 Profitability Analysis and Interpretation LO4, 5, 6, 7, 8 P3-56. Analysis and Interpretation of Profitability MONDELEZ Mondelez International Inc. is one of the world's largest snacks companies, with a brand portfolio that INTERNATIONAL includes: Nabisco, Oreo, Milka, Cadbury and Trident. The company's balance sheets and income state- INC. ments follow. Refer to these financial statements to answer the requirements. (MDLZ) MONDELEZ INTERNATIONAL INC. Consolidated Statement of Earnings For the Years Ended December 31 (in millions) 2015 2014 2013 Net revenues. $29,636 $34,244 $35,299 Cost of sales. 18,124 21,647 22,189 Gross profit. ... 11,512 12,597 13,110 Selling, general and administrative expenses. 7,577 8,457 8,679 Asset impairment and exit costs... 901 692 273 Gains on coffee business transactions and divestitures. ..... (6,822) (30) Loss on deconsolidation of Venezuela. 778 - Amortization of intangibles.. 181 206 217 Operating income..... 8,897 3,242 3,971 Interest and other expense, net. 1,013 688 1,579 Earnings from continuing operations before income taxes .. 7,884 2,554 2,392 Provision for income taxes.. 593 353 60 Earnings from continuing operations. 7,291 2,201 2,332 Earnings from discontinued operations, net of income taxes.. 1,603 Net earnings .... .7,291 2,201 3,935 Noncontrolling interest. 24 17 20 Net earnings attributable to Mondelez International.. $ 7,267 $ 2,184 $ 3,915 MONDELEZ INTERNATIONAL INC. Consolidated Balance Sheets As of December 31 (in millions, expect share data) 2015 2014 620Statement%20Analysis%20%20Valuation%20by%20Easton,-Acct%20460-1%20(2).pdf (D Page view | A Read aloud | Draw + Net earnings attributable to Mondelez International... $ 7,267 $ 2,184 $ 3,915 $ 1,870 $ 1,631 2,634 3,802 949 MONDELEZ INTERNATIONAL INC. Consolidated Balance Sheets As of December 31 (in millions, expect share data) 2015 2014 Assets Cash and cash equivalents ... Trade receivables (net of allowances of $54 at 2015 and $66 at 2014). ........ Other receivables (net of allowances of $109 at 2015 and $91 at 2014).. Inventories, net.. Deferred income taxes Other current assets. Total current assets.. Property, plant and equipment, net. Goodwill ..... Intangible assets, net Prepaid pension assets. Equity method investments. Other assets... Total Assets. 1,408 1,212 2,609 3,480 480 .633 8,958 11,750 8,362 9,827 . 20,664 23,389 18,768 20,335 69 53 5,387 662 .635 $62,843 $66,771 755 continued dule 3 | Profitability Analysis and Interpretation 3-60 2,880 As of December 31 (in millions, expect share data 2015 2014 Liabilities... Short-term borrowings Current portion of long-term debt. Accounts payable. Accrued marketing. Accrued employment costs Other current liabilities .. Total current liabilities.. Long-term debt... Deferred income taxes Accrued pension costs.. Accrued postretirement health care costs Other liabilities.. Total liabilities. Equity Common stock, no par value (1,996,537,778 shares issued at 2015 and 2014). .. Additional paid-in capital. Retained earnings ..... Accumulated other comprehensive losses. Treasury stock, at cost.... Total Mondelz International shareholders' equity. Noncontrolling interest 88 Total equity..... Total liabilties and equity.. $ 236 $ 1,305 605 1,530 . 4,890 5,299 1,634 2,047 844 946 . 2,713 . 10,922 14,007 14,557 13,821 4,750 5,512 .2,183 2,912 499 526 1,832 $34,743 $38,918 2,140 31,760 31,651 20,700 14,529 (9,986) (7,318) (14,462) ..28,012 27,750 (11,112) 103 28,100 27,853 $62,843 $66,771 Required a.Compute net operating profit after tax (NOPAT) for 2015. Assume that the combined federal and state statutory tax rate is 37%. b.Compute net operating assets (NOA) for 2015 and 2014. Como DNO A and dicamcnta it into nat narating cofit marrin (NODM and nat nating accet L 3-59 Module 3 1 Profitability Analysis and Interpretation LO4, 5, 6, 7, 8 P3-56. Analysis and Interpretation of Profitability MONDELEZ Mondelez International Inc. is one of the world's largest snacks companies, with a brand portfolio that INTERNATIONAL includes: Nabisco, Oreo, Milka, Cadbury and Trident. The company's balance sheets and income state- INC. ments follow. Refer to these financial statements to answer the requirements. (MDLZ) MONDELEZ INTERNATIONAL INC. Consolidated Statement of Earnings For the Years Ended December 31 (in millions) 2015 2014 2013 Net revenues. $29,636 $34,244 $35,299 Cost of sales. 18,124 21,647 22,189 Gross profit. ... 11,512 12,597 13,110 Selling, general and administrative expenses. 7,577 8,457 8,679 Asset impairment and exit costs... 901 692 273 Gains on coffee business transactions and divestitures. ..... (6,822) (30) Loss on deconsolidation of Venezuela. 778 - Amortization of intangibles.. 181 206 217 Operating income..... 8,897 3,242 3,971 Interest and other expense, net. 1,013 688 1,579 Earnings from continuing operations before income taxes .. 7,884 2,554 2,392 Provision for income taxes.. 593 353 60 Earnings from continuing operations. 7,291 2,201 2,332 Earnings from discontinued operations, net of income taxes.. 1,603 Net earnings .... .7,291 2,201 3,935 Noncontrolling interest. 24 17 20 Net earnings attributable to Mondelez International.. $ 7,267 $ 2,184 $ 3,915 MONDELEZ INTERNATIONAL INC. Consolidated Balance Sheets As of December 31 (in millions, expect share data) 2015 2014 620Statement%20Analysis%20%20Valuation%20by%20Easton,-Acct%20460-1%20(2).pdf (D Page view | A Read aloud | Draw + Net earnings attributable to Mondelez International... $ 7,267 $ 2,184 $ 3,915 $ 1,870 $ 1,631 2,634 3,802 949 MONDELEZ INTERNATIONAL INC. Consolidated Balance Sheets As of December 31 (in millions, expect share data) 2015 2014 Assets Cash and cash equivalents ... Trade receivables (net of allowances of $54 at 2015 and $66 at 2014). ........ Other receivables (net of allowances of $109 at 2015 and $91 at 2014).. Inventories, net.. Deferred income taxes Other current assets. Total current assets.. Property, plant and equipment, net. Goodwill ..... Intangible assets, net Prepaid pension assets. Equity method investments. Other assets... Total Assets. 1,408 1,212 2,609 3,480 480 .633 8,958 11,750 8,362 9,827 . 20,664 23,389 18,768 20,335 69 53 5,387 662 .635 $62,843 $66,771 755 continued dule 3 | Profitability Analysis and Interpretation 3-60 2,880 As of December 31 (in millions, expect share data 2015 2014 Liabilities... Short-term borrowings Current portion of long-term debt. Accounts payable. Accrued marketing. Accrued employment costs Other current liabilities .. Total current liabilities.. Long-term debt... Deferred income taxes Accrued pension costs.. Accrued postretirement health care costs Other liabilities.. Total liabilities. Equity Common stock, no par value (1,996,537,778 shares issued at 2015 and 2014). .. Additional paid-in capital. Retained earnings ..... Accumulated other comprehensive losses. Treasury stock, at cost.... Total Mondelz International shareholders' equity. Noncontrolling interest 88 Total equity..... Total liabilties and equity.. $ 236 $ 1,305 605 1,530 . 4,890 5,299 1,634 2,047 844 946 . 2,713 . 10,922 14,007 14,557 13,821 4,750 5,512 .2,183 2,912 499 526 1,832 $34,743 $38,918 2,140 31,760 31,651 20,700 14,529 (9,986) (7,318) (14,462) ..28,012 27,750 (11,112) 103 28,100 27,853 $62,843 $66,771 Required a.Compute net operating profit after tax (NOPAT) for 2015. Assume that the combined federal and state statutory tax rate is 37%. b.Compute net operating assets (NOA) for 2015 and 2014. Como DNO A and dicamcnta it into nat narating cofit marrin (NODM and nat nating accet L