Compute, Disaggregate, and Interpret ROE and RNOA

Headquartered in Calgary, Alberta, Husky Energy Inc. is a publicly traded, integrated energy company. Selected fiscal year balance sheet and income statement information for Husky Energy follow (Canadian $ millions).

C$ millions20182017Revenues, net$26,702Net income attributable to Husky1,748Pretax NNE283Operating assets38,677$36,266Operating liabilities11,83711,424Equity attributable to Husky shareholders23,52221,547Tax rate22.00%

a.Compute the 2018 return on equity (ROE) and the 2018 return on net operating assets (RNOA).

Note:Round percentages to two decimal places (for example, enter 6.66% for 6.6555%).

2018 Return on equity:Answer

%

2018 Return on net operating assets:Answer

%

b.Disaggregate RNOA into net operating profit margin (NOPM) and net operating asset turnover (NOAT).

Note:For NOPM and RNOA, round percentages to two decimal places (for example, enter 6.66% for 6.6555%).

Note:For NOAT, round amount to three decimal places (for example, enter 6.776 for 6.77555).

NOPMxNOAT=RNOAAnswer

xAnswer

=Answer

c.Compute the percentage of RNOA to ROE, and compute Husky's nonoperating return for 2018.

Note:Round percentages to two decimal places (for example, enter 6.66% for 6.6555%).

Percentage of RNOA to ROE:Answer

%

Nonoperating return:Answer

%

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