Question
Calculate NOPAT for the past two years using a statutory tax rate of 25% for the tax shield calculation. Calculate NOA for the past three
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Calculate NOPAT for the past two years using a statutory tax rate of 25% for the tax shield calculation. Calculate NOA for the past three years. (You will need to gather information from one additional 10-K report to calculate average operating assets and equity for question 6.)
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Calculate RNOA and ROE for the most recent two years. (As above, you will need to gather information from one additional 10-K report to calculate average operating assets and equity.) Expand the RNOA into NOPM and Asset Turnover measures. Expand ROE into Profit Margin, Asset Turnover and Leverage. Comment briefly on the differences between the measures of RNOA and ROE and note any changes across the two years.
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Suppose that BBBY recorded the cash received for gift cards immediately as revenues in the income statement. Explain how this would misstate the financial statements.
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