Disaggregate RNOA into profitability and asset turnover components (NOPM and NOAT, respectively). Remember to include both net sales and financial services revenue in total revenue. What explains the year-over-year change in RNOA?

Compute net nonoperating expenses (NNE) for 2013 and 2012. Assume that combined federal and state statutory tax rate is 37% for both fiscal years.

Compute net nonoperating obligations (NNO) for 2013 and 2012.

Compute Spread for 2013 and 2012. Return on net operating assets is 14.5% and 14.3% in 2013 and 2012, respectively. In 2011, net nonoperating obligations were $798.5 million.

Compute FLEV for 2013 and 2012. In 2011, net nonoperating obligations were $798.5 million and total shareholders equity was $1,547.3 million.

Calculate return on equity (ROE) for both years. Show that ROE = RNOA + (FLEV Spread) x NCI ratio. Interpret the year-over-year change in ROE. In 2011, shareholders equity attributable to Snap-On was $1,530.9. Hint: consider the changes in both FLEV and Spread)

Snap-On Incorporated
Consolidated Statements of Earnings
(Amounts in millions)		For the fiscal year ended
		2013	2012
Net sales		$3,056.50	$2,937.90
Cost of goods sold		-1,583.60	-1,547.90
Gross profit		1,472.90	1,390.00
Operating expenses		-1,012.40	-980.3
Operating earnings before financial services		460.5	409.7
Financial services revenue		181	161.3
Financial services expenses		-55.3	-54.6
Operating income from financial services		125.7	106.7
Operating earnings		586.2	516.4
Interest expense		-56.1	-55.8
Other income (expense) -- net		-3.9	-0.4
Earnings before income taxes and equity earnings		526.2	460.2
Income tax expense		-166.7	-148.2
Earnings before equity earnings		359.5	312
Equity earnings, net of tax		0.2	2.6
Net earnings		359.7	314.6
Net earnings attributable to noncontrolling interests		-9.4	-8.5
Net earnings attributable to Snap-on Incorporated		$350.30	$306.10
Snap-On Incorporated
Consolidated Balance Sheets
	Fiscal Year End
(Amounts in millions)	2013	2012
Cash and cash equivalents	$217.60	$214.50
Trade and other accounts receivable - net	531.6	497.9
Finance receivables - net	374.6	323.1
Contract receivables - net	68.4	62.7
Inventories - net	434.4	404.2
Deferred income tax assets	85.4	81.8
Prepaid expenses and other assets	84.2	84.8
Total current assets	1,796.20	1,669.00
Property and equipment - net	392.5	375.2
Deferred income tax assets	57.1	110.4
Long-term finance receivables - net	560.6	494.6
Long-term contract receivables - net	217.1	194.4
Goodwill	838.8	807.4
Other intangibles - net	190.5	187.2
Other assets	57.2	64.1
Total assets	$4,110.00	$3,902.30
Notes payable and current maturities of long-term debt	$113.10	$5.20
Accounts payable	155.6	142.5
Accrued benefits	48.1	50.6
Accrued compensation	95.5	88.3
Franchisee deposits	59.4	54.7
Other accrued liabilities	243.7	247.9
Total current liabilities	715.4	589.2
Long-term debt	858.9	970.4
Deferred income tax liabilities	143.8	127.1
Retiree health care benefits	41.7	48.4
Pension liabilities	135.8	260.7
Other long-term liabilities	84	87.5
Total liabilities	1,979.60	2,083.30
Preferred stock
Common stock	67.4	67.4
Additional paid-in capital	225.1	204.6
Retained earnings	2,324.10	2,067.00
Accumulated other comprehensive income (loss)	-44.8	-124.2
Treasury stock at cost	-458.6	-412.7
Total shareholders equity attributable to Snap-on Inc.	2,113.20	1,802.10
Noncontrolling interests	17.2	16.9
Total shareholders equity	2,130.40	1,819.00
Total liabilities and shareholders equity	$4,110.00	$3,902.30