Compute RNOA with Disaggregation Selected balance sheet and income statement information for Home Depot follows.

$ millions	Jan. 31, 2016	Feb. 01, 2015
Operating assets	$40,583	$38,473
Nonoperating assets	2,241	1,748
Total assets	42,824	40,221
Operating liabilities	15,018	13,527
Nonoperating liabilities	21,285	17,167
Total liabilities	36,303	30,694
Sales	88,999
Net operating profit before tax (NOPBT)	12,024
Nonoperting expense before tax	778
Tax expense	4,088
Net income	7,158

Round answers to two decimal places (ex: 0.12345 = 12.35%).

a. Compute return on net operating assets (RNOA). Assume a statutory tax rate of 37%. Answer

%

b. Disaggregate RNOA into components of profitability and productivity and show that the product of the two components equals RNOA. Assume a statutory tax rate of NOPM Answer

% NOAT Answer

Analysis and Interpretation of Ratios When RNOA Exceeds ROE Refer to the balance sheets and income statement below for Facebook Inc. FACEBOOK INC. Consolidated Statement of Income For Year Ended December 31, $ millions 2018 Revenue $55,838 Costs and expenses Cost of revenue 9,355 Research and development 10,273 Marketing and sales 7,846 General and administrative 3,451 Total costs and expenses 30,925 Income from operations 24,913 Interest and other income (expense), net 448 Income before provision for income taxes 25,361 Provision for income taxes 3,249 Net income $22,112 FACEBOOK INC. Consolidated Balance Sheet At December 31,5 millions 2018 2017 Current assets Cash and cash equivalents 510,019 58,079 Marketable securities 31,095 33.632 Accounts receivable, net 7,587 5.832 Prepaid expenses and other current assets 1,779 1,020 Total current assets 50,480 48.563 Property and equipment, net 24,683 13.721 Intangible assets, ne Goodwill 18,301 18.221 Other assets $2.576 $2.135 Total assets 397,334 54 524 Current liabilities Accounts payable $820 5380 Partners payable 541 390 Accrued expenses and other current liabilities 5,509 2.892 Deferred revenue and deposits 147 98 Total current liabilities 7,017 3.760 Other liabilities 6190 6.417 Total liabilities 13,207 10.177 Stockholders' equity Common stock and additional paid-in capital 42,906 40,584 Accumulated other comprehensive loss (760) (227) Retained earnings 41,981 33.990 Total stockholders' equity 84127 74.347 Tecal liabilities and stockholders' equity 597,334 584524 a. Compute net operating profit after tax (NOPAT) for 2018. Assume that the combined federal and state statutory tax rate is 22%. Hint: Carefully consider whether %. nonoperating expense is positive or negative. Note: Round answer to the nearest million. $0 (5 millions) b. Compute net operating assets (NOA) for 2018 and 2017. ) . NOA for 2017: 0 NOA for 2018: 0 c. Compute RNOA and disaggregate it into net operating profit margin (NOPM) and net operating asset turnover (NOAT) for 2018. 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 four decimal places (for example, enter 6.7756 for 6.775555). NOPM X NOAT = RNOA 0% 0 % d. Compute return on equity (ROE) for 2018, Note: Round percentage to two decimal places (for example, enter 6.66% for 6.6555%). 0