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Adjustments for Multi-Year Capitalization of Operating Leases Use the information provided in Analyst Adjustments 10.1 for Lowes along with the information below to answer the
Adjustments for Multi-Year Capitalization of Operating Leases
Use the information provided in Analyst Adjustments 10.1 for Lowes along with the information below to answer the requirements.
Using excel:
- Compute the following ratios using the unadjusted and the adjusted numbers for each year. For simplicity here, use year-end numbers to calculate the ratios.
Return on equity (ROE)
Return on net operating assets (RNOA)
Net operating profit margin (NOPM)
Net operating asset turnover (NOAT)
Financial leverage (FLEV)
- Does the lease capitalization make a large difference in any of these ratios? Explain.
$ millions 2019 2018 2017 Net operating assets (NOA). Net nonoperating obligations (NNO) Total stockholders' equity. Net nonoperating expense (NNE) Net operating profit after tax (NOPAT). Net income. Revenue. $18,882 15,238 3,644 487 2,801 2,314 71,309 $21,770 15,897 5,873 494 3,941 3,447 68,619 $21,109 14,675 6,434 503 3,596 3,093 65,017
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