Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Analysis and Interpretation of ROE and RNOA with No Noncontrolling Interest Balance sheets and income statements for Nordstrom, Inc. follow. Refer to these financial statements

Analysis and Interpretation of ROE and RNOA with No Noncontrolling Interest

Balance sheets and income statements for Nordstrom, Inc. follow. Refer to these financial statements to answer the requirements.

NORDSTROM, INC. Consolidated Statements of Earnings
For Fiscal Years Ended ($ millions) 2010 2009 2008
Sales $ 8,258 $ 8,272 $ 8,828
Credit card revenues 369 301 252
Total revenues 8,627 8,573 9,080
Cost of sales and related buying and occupancy costs (5,328) (5,417) (5,526)
Selling, general and administrative expenses
Retail (2,109) (2,103) (2,130)
Credit (356) (274) (177)
Earnings before interest and income taxes 834 779 1,247
Net interest expense (138) (131) (74)
Earnings before income taxes 696 648 1,173
Income tax expense (255) (247) (458)
Net earnings $ 441 $ 401 $ 715

NORDSTROM, INC. Consolidated Balance Sheets
($ millions) January 30, 2010 January 31, 2009
Assets
Current Assets
Cash and cash equivalents $ 795 $ 72
Accounts receivable, net 2,035 1,942
Merchandise inventories 898 900
Current deferred tax assets, net 238 210
Prepaid expenses and other 88 93
Total current assets 4,054 3,217
Land, buildings and equipment, net 2,242 2,221
Goodwill 53 53
Other assets 230 170
Total assets $ 6,579 $ 5,661
Liabilities and Shareholders' Equity
Current liabilities
Accounts payable $ 726 $ 563
Accrued salaries, wages and related benefits 336 214
Other current liabilities 596 525
Current portion of long-term debt 356 299
Total current liabilities 2,014 1,601
Long-term debt, net 2,257 2,214
Deferred property incentives, net 469 435
Other liabilities 267 201
Shareholders' equity
Common stock, no par value 1,066 997
Retained earnings 525 223
Accumulated other comprehensive income (loss) (19) (10)
Total shareholders' equity 1,572 1,210
Total liabilities and shareholders' equity $ 6,579 $ 5,661

HINT: For Sales use "Total revenues" for your computations, when applicable.

(a) Compute net operating profit after tax (NOPAT) for 2010. Assume that the combined federal and statutory rate is: 37.0%. (Round your answer to the nearest whole number.) 2010 NOPAT = $_________

(b) Compute net operating assets (NOA) for 2010 and 2009. 2010 NOA = $___________ 2009 NOA = $___________

(c) Compute RNOA, net operating profit margin (NOPM), and net operating asset turnover (NOAT) for 2010. Do not use NOPM x NOAT to calculate RNOA. (Do not round until final answers. Round to two decimal places.) 2010 RNOA = _________% 2010 NOPM = _________% 2010 NOAT = ________

**Please show work!

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting Tools for business decision making

Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso

6th Edition

978-1119191674, 047053477X, 111919167X, 978-0470534779

More Books

Students also viewed these Accounting questions

Question

Discuss the meaning of an optimal capital budget.

Answered: 1 week ago

Question

=+Could you use an ambient ad?

Answered: 1 week ago