Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Compute and Interpret Ratios Selected balance sheet and income statement information from Illinois Tool Works follows. $ millions 2019 2018 2017 Net operating profit after
Compute and Interpret Ratios Selected balance sheet and income statement information from Illinois Tool Works follows. $ millions 2019 2018 2017 Net operating profit after tax (NOPAT) $2,610 $2,711 Net income 2,521 2,563 Total assets 15,068 14,870 $16,780 Equity 3,026 3,254 3,254 Net operating profit after tax (NOA) 8,869 9,462 10,089 Treasury stock 18,982 17,545 15,562 a. Compute profitability measures: RNOA, ROA and ROE for 2019 and 2018 using the numbers as reported by the company. Note: Round answers to one decimal place (ex: 0.2345 = 23.5%). 2019 2018 Metric RNOA 0 % 0 % ROA 0 % 0 % ROE 0 % 0 % b. Adjust equity and total assets for the amount of treasury stock. $ millions 2019 2018 2017 Assets, restated $ 0 $ 0 $ 0 Equity, restated 0 $ 0 $ 0 Using these restated numbers, recompute RNOA, ROA and ROE for both years. Note: Round answers to one decimal place (ex: 0.2345 = 23.5%). Metric RNOA 2019 0 % 2018 0 % 0 % 0 % ROA 0 % 0 % ROE C. Which profitability measures (from part a or part b) better reflect the company's profit levels during the two years? Of the three measures, which one is least influenced by the company's stock repurchase activity
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started