Compute ROE and RNOA with Disaggregation

Selected balance sheet and income statement information for Home Depot follows.

$ millionsJan. 31, 2016Feb. 01, 2015Operating assets$40,333$38,223Nonoperating assets2,2161,723Total assets42,54939,946Operating liabilities14,91813,427Nonoperating liabilities21,31517,197Total liabilities36,23330,624Total stockholders' equity6,3169,322Sales88,519Net operating profit before tax (NOPBT)11,774Nonoperting expense before tax753Tax expense4,012Net income7,009

Round all answers totwo decimal places(ex: 0.12345 = 12.35%)

a. Compute return on equity.

b. Compute return on net operating assets (RNOA).

c. Use ROE and RNOA to determine the nonoperating return for the year.

d. Disaggregate RNOA into components of profitability and productivity and show that the product of the two components equals RNOA.

NOPM

NOAT

RNOA