E13-20. Identifying and Computing Net Operating Assets (NOA) and Net Nonoperating Obligations (NNO) Following are the balance sheets and statement of earnings for Home Depot Inc. for fiscal year ended February 3. 2019, which the company labels fiscal year 2018. THE HOME DEPOT INC. Consolidated Balance Sheets February 3, January 28, $ millions, except par value 2019 2018 Assets Current assets Cash and cash equivalents. $ 1,778 $ 3,595 Receivables, net . . ..... . 1,936 1,952 Merchandise inventories. .. 13,925 12,748 Other current assets . . . . 890 638 Total current assets. 18,529 18,933 Net property and equipment. . . 22,375 22.075 Goodwill . . . .. 2.252 2.275 Other assets. . 847 1.246 Total assets . . . $44,003 $44,529 continuedTHE HOME DEPOT INC. Consolidated Balance Sheets February 3, January 28, $ millions, except par value 2019 2018 Liabilities and Stockholders' Equity Current liabilities Short-term debt. . . $ 1,339 $ 1,559 Accounts payable . . 7,755 7,244 Accrued salaries and related expenses 1,506 1,640 Sales taxes payable . . 656 520 Deferred revenue ....... 1,782 1,805 Income taxes payable. . . 11 54 Current installments of long-term debt . 1.056 1,202 Other accrued expenses. . . 2,611 2,170 Total current liabilities ..... . . . ..... 16,716 16,194 Long-term debt, excluding current installments . 26,807 24,267 Deferred income taxes . . . . 491 440 Other long-term liabilities 1,867 2,174 Total liabilities . . . . 45,881 43,075 Common stock, par value $0.05; authorized: 10,000 shares; issued: 1,782 at February 3, 2019 and 1,780 shares at January 28, 2018; outstanding: 1,105 shares at February 3, 2019 and 1,158 shares at January 28, 2018 . 89 89 Paid-in capital. . . . . ... 10,578 10,192 Retained earnings . ... . 46.423 39,935 Accumulated other comprehensive loss. . . (772) (566) Treasury stock, at cost, 677 shares at February 3, 2019 and 622 shares at January 28, 2018 . . .. (58,196) (48,196) Total stockholders' (deficit) equity. . .. . .. (1,878) 1,454 Total liabilities and stockholders' equity $44,003 $44,529THE HOME DEPOT INC. Consolidated Statements of Earnings February 3, January For Fiscal Year Ended ($ millions) 2019 28, 2018 Net Sales . . $108,203 $100,904 Cost of sales. .. 71,043 66,548 Gross profit . . . 37,160 34,356 Operating expenses Selling, general and administrative . . . .. 19,513 17,864 Depreciation and amortization . 1,870 1,811 Impairment loss. . . 247 0 Total operating expenses 21.630 19,675 Operating income . . 15,530 14,681 Interest and other (income) expense: Interest and investment income . . . . . . (93) (74) Interest expense . . . 1,051 1,057 Other. . .. 16 0 Interest and other, net . . 974 983 Earnings before provision for income taxes 14.556 13,698 Provision for income taxes. . . . 3.435 5,068 Net earnings . . $ 11,121 $ 8,630 a. Compute net operating assets (NOA) and net nonoperating obligations (NNO) for the fiscal year ended February 3, 2019. b. For the fiscal year ended February 3, 2019, show that: NOA = NNO + Stockholders' equity. c. Compute net operating profit after tax (NOPAT) for the year ended February 3, 2019. Assume a federal and state combined statutory tax rate of 22%. Also, consider the Impairment loss of $247 million before tax ($193 million after tax) to be a nonpersistent item. Exclude the after-tax amount from your NOPAT calculation
