Hello I already have all of the answers Im just not sure if they are correct and also im confused on how to calculate the NOA

Accounting 400 Midterm Exam February 24, 2017 (a) Compute net operating profit after tax (NOPAT) for 2012. Assume that the combined federal and statutory rate is: 37% NOPAT 2012 2011 Operating Income 2,570 2,828 Deduct Income Tax at 37% NOPAT 2670 x (1- 0.37) =1619 2828 x (1- 0.37) = 1782 (b) Compute net operating assets (NOA) for 2012 and 2011. Treat non-current investments as a no operating item. Total Assets- Total liabilities- Cash and investments + Long term debts 2012 2011 12,288 16,623 (c) Compute RNOA and dis aggregate it into net operating profit margin (NOPM) and net operating asset turnover (NOAT) for 2012. Confirm that RONA=NOPM X NOAT. The median NOPM and NOAT for companies in the packaged food industry (see Exhibit 4.4) is 5% and 2.1, respectively, yielding a median RNOA of 10.5%. Comment on NOPM and NOAT estimates for KFT in comparison to industry medians. RNOA = NOPAT / NOA 2012 2011 13.18% 10.72% Net operating Profit Margin (NOPM) = 2012 2011 NOPAT / SALES 0.09 0.10 Net Operating Turnover (NOT) 2012 2011 Sales / NOA 1.49 1.12 RNOA = NOPM * NOT 2012 2011 13.18% 10.72% (d) Compute net no operating obligations (NNO) for 2012 and 2011. Confirm the relation: NOA=NNO+ Stockholders equity. 2012 2011 Non-Operating Obligations (NNO) = Non-Operating Liabilities - Non Operating Assets Non-Operating Liabilities Current portion of LTD 5 8 Long Term Debts 9,966 27 Non-Operating Assets Cash and Cash Equivalents 1,255 Non-Operating Obligations (NNO) = 8,716 35 Stockholders' Equity 3,572 16,588 NOA 12,288 16623 (e) Compute return on equity (ROE) for 2012 2012 Net margin after tax / Shareholder`s Equity 45.97% 1642 / 3572 (f) Infer the non-operating return component of ROE for 2012 Non- Operating Return Component of ROE 2012 ROE 45.97% RNOA 13.18% 32.79% (g) Comment on the difference between ROE and RNOA. What does this relation suggest about Kraft`s use debt? Non-operating return component of ROE is higher than operating component which indicates that company is using higher debts as compared to equity and it is trading on equity. A. Briefly describe the company's 2012 reconstructing program. Provide two examples of common non-cash charges associated with corporate reconstructing activities. In 2012, HP Company adopted its cost-restructuring program with the aim of reducing 29,000 positions in the enterprise by the year 2014. This would see it incur an aggregate charge of $ 3.7Billion. Out of the $3.7 Billion total cost; $3.1 Billion was allocated to cover workforce costs where an enhanced early retirement scheme has also been established, and the remaining $0.6 being used in the data center and real estate consolidation. By the end of fiscal year, 2012 a charge of $2.1 Billion was recorded; $41Million used in stock-based compensation settlement while of the $105 million allocated to data center and real estate consolidation, $56 million was associated with assets impairment. On average $97 (41M+ 56M) million went to non-cash charges for the restructuring process. The most common noncash expenses associated with corporate restructuring include stock-based compensation and asset impairment. B. Using the financial statement effects template show the effects on financial statements on (1) 2012 reconstructing charge of 2,266 million (2) 2012 cash payment of 840 million. Balance Sheet: Cash Assets + Non-cash Assets = Liabilities + Contributed Capital + Earned Capital 1. Balance Sheet as at 2012 Assets Non-cash Asset $ 2, 266 total assets $ 2, 266 Restructuring Liability $ 2, 266 Liabilities Restructuring Liability total liabilities $ 2, 266 $ 2, 266 Liabilities Restructuring Liability cash total liabilities $ 1426 $ 840 $ 2, 266 2. Balance Sheet as at 2012 Assets Non-cash Asset total assets $ 2, 266 $ 2, 266 Income Statement: Rev-Expense=Net Income Operating Expense = $ 2, 266 C. Assume that instead of accurately estimating the anticipated reconstructing charging 2012 the company overestimated them by 30 million. How would this overestimation effect financial statements (1) 2012 and (2) 2013 when Severance costs are paid in cash? Income statement for the year 2012 million $ Balance as at Oct,31,2011 reconstruction charges cash payment no-cash settlement balance as at Oct,31,2012 813 2296 -840 -1212 1057 Income statement for the year 2013; assuming all other costs remain intact million $ Balance as at Oct,31,2012 1057 reconstruction charges 2326 cash payment -840 no-cash settlement -1212 balance as at Oct,31,2013 1331 D. The company reports the total charge will amount to 3.7 billion where is the 2012 income statement from this weekend why do investors care to know the total charge if it does not impact the current period Earnings? The total reconstruction cost is $3.7 billion. Nonetheless, the amount is expected to be paid over a three-year period. This means that the whole ransom will not be accounted for in 2012 but for each passing year, an amount will be spread as per the payment. In 2012 for instance, $2.1Billion is charged to the income statement, but some of the amounts, that is, $ 97 Million relates to the non-cash restructuring charges. The management of any firm is required to disclose any relevant information as pertains the company to all stakeholders even if current earnings are not affected as the value of the organization is impacted. Compute net operating profit after tax (NOPAT) for 2012. Assume that the combined federal and statutory rate is: 37% Compute net operating assets (NOA) for 2012 and 2011. Treat noncurrent investments as a no operating item. Compute RNOA and dis aggregate it into net operating profit margin (NOPM) and net operating asset turnover (NOAT) for 2012. Confirm that RONA=NOPM X NOAT. The median NOPM and NOAT for companies in the packaged food industry (see Exhibit 4.4) is 5% and 2.1, respectively, yielding a median RNOA of 10.5%. Comment on NOPM and NOAT estimates for KFT in comparison to industry medians. Compute net no operating obligations (NNO) for 2012 and 2011. Confirm the relation: NOA=NNO+ Stockholders equity. Compute return on equity (ROE) for 2012 Net margin after tax / Shareholder`s Equity Infer the non-operating return component of ROE for 2012 Non- Operating Return Component of ROE Comment on the difference between ROE and RNOA. What does this relation suggest about Kraft`s use debt? Assets 2012 2013 Cash and Cash equivalents $1255 $- Receivables (net of allowances of $28 in 2012 and $23 in 2011) Inventories net Deferred income taxes Other current assets Total Current assets Property, plant and equipment net Goodwill Intangible Assets net Other assets 1089 1928 420 131 4823 4204 11346 2631 325 Total assets $23329 903 1943 232 194 3272 4278 11316 2630 43 $2153 9 Liabilities Current portion of long term debt Accounts payable Accrued marketing Accrued employment costs Dividends payable Accrued post-retirement health care cost Other current liabilities Total current liabilities Long term debt Deferred income tax Accrued pension costs Accrued post retirement health care costs Other liabilities Total liabilities Equity Common stock par value (592,783,696 shares issued 2012 and 0 in 2011) Additional paid-in capital $5 1556 740 194 296 236 579 3606 9966 288 1990 3502 405 19757 $8 1447 575 242 ------300 2572 27 1594 117 --641 4951 --4240 ----- Parent company investment --- --- Retained earnings/ (deficit) Accumulated other comprehensive losses Treasury stock, at cost Total equity (206) (460) (2) 3572 ---(125) ---16588 Total liabilities and equity $23329 Income Statement 2012 Net revenues Cost of sales Gross profit selling , general and administrative expenses Asset impairment and exit costs Operating income Interest and other expenses net Royalty income from Modelez International Earnings from continuing operations before income tax Provisions for income taxes Earnings from continuing operations Earnings and Gain from discontinued operations, net income taxes Net Earnings $18339 12499 5840 3029 141 2670 (258) 41 $18655 12813 5842 3016 (2) 2828 (7) 55 $17797 11777 6020 3063 (8) 2965 (6) 43 2453 2876 3002 811 1642 1101 1775 1112 1890 ---- ---- 1644 $1642 $1775 $3534 THE THRID ROW IN THE INCOME STATEMENT IS THE YEAR 2010 $2153 9 2011 Accounting 400 Midterm Exam February 24, 2017 (a) Compute net operating profit after tax (NOPAT) for 2012. Assume that the combined federal and statutory rate is: 37% NOPAT 2012 2011 Operating Income 2,670 2,828 Deduct Income Tax at 37% NOPAT 2670 x (1- 0.37) =1682 2828 x (1- 0.37) = 1782 (b) Compute net operating assets (NOA) for 2012 and 2011. Treat non-current investments as a no operating item. NOA= operating assets - operating liabilities Operating assets= total assets- investments Operating liabilities = Total liabilities-long term debt (LTD)-current portion of LTD 2012 Operating assets= 23329 2011 21539 Operating liabilities= 19757- 9966-5 4951-27-8 Net operating assets 16623 13,543 (c) Compute RNOA and dis aggregate it into net operating profit margin (NOPM) and net operating asset turnover (NOAT) for 2012. Confirm that RONA=NOPM X NOAT. The median NOPM and NOAT for companies in the packaged food industry (see Exhibit 4.4) is 5% and 2.1, respectively, yielding a median RNOA of 10.5%. Comment on NOPM and NOAT estimates for KFT in comparison to industry medians. RNOA = NOPAT / average NOA 2012 {1682 / 13,543} *100 2011 {1782 / 16623}*100 12.41% 10.72% Net operating Profit Margin (NOPM) = 2012 NOPAT / SALES 2011 1682 / 18655 1782 / 17797 0.09 *100 = 9% Net Operating Asset Turnover (NOAT) Sales / NOA RNOA = NOPM * NOAT 0.10 * 100 = 10% 2012 2011 18655 / 13,543 17797 / 16623 1.38 1.07 2012 2011 12.42% 10.72% Comparing the performance of KFT to the industry, the firm is doing relatively well. It's able to generate a good profit margin from its operations as well as use its assets to generate revenue; given that the values lie very close to the industry's mediums. (d) Compute net no operating obligations (NNO) for 2012 and 2011. Confirm the relation: NOA=NNO+ Stockholders equity. 2012 2011 Non-Operating Obligations (NNO) = Non-Operating Liabilities - Non Operating Assets Non-Operating Liabilities Current portion of LTD 5 8 Long Term Debts 9,966 27 Non-Operating Obligations (NNO) = 9,971 35 Stockholders' Equity 3,572 16,588 NOA 13,543 16623 (e) Compute return on equity (ROE) for 2012 2012 Net margin after tax / Shareholder`s Equity 45.97% 1642 / 3572 (f) Infer the non-operating return component of ROE for 2012 Non- Operating Return Component of ROE 2012 ROE 45.97% net income after tax / equity RNOA = net income before tax / total assets 12.33% 33.66% (g) Comment on the difference between ROE and RNOA. What does this relation suggest about Kraft`s use debt? Non-operating return component of ROE is higher than operating component which indicates that company is using higher debts as compared to equity and it is trading on equity. A. Briefly describe the company's 2012 reconstructing program. Provide two examples of common non-cash charges associated with corporate reconstructing activities. In 2012, HP Company adopted its cost-restructuring program with the aim of reducing 29,000 positions in the enterprise by the year 2014. This would see it incur an aggregate charge of $ 3.7Billion. Out of the $3.7 Billion total cost; $3.1 Billion was allocated to cover workforce costs where an enhanced early retirement scheme has also been established, and the remaining $0.6 being used in the data center and real estate consolidation. By the end of fiscal year, 2012 a charge of $2.1 Billion was recorded; $41Million used in stock-based compensation settlement while of the $105 million allocated to data center and real estate consolidation, $56 million was associated with assets impairment. On average $97 (41M+ 56M) million went to non-cash charges for the restructuring process. The most common noncash expenses associated with corporate restructuring include stock-based compensation and asset impairment. B. Using the financial statement effects template show the effects on financial statements on (1) 2012 reconstructing charge of 2,266 million (2) 2012 cash payment of 840 million. Balance Sheet: Cash Assets + Non-cash Assets = Liabilities + Contributed Capital + Earned Capital 1. Balance Sheet as at 2012 Assets Non-cash Asset $ 2, 266 total assets $ 2, 266 Restructuring Liability $ 2, 266 Liabilities Restructuring Liability total liabilities $ 2, 266 $ 2, 266 Liabilities Restructuring Liability cash total liabilities $ 1426 $ 840 $ 2, 266 2. Balance Sheet as at 2012 Assets Non-cash Asset total assets $ 2, 266 $ 2, 266 Income Statement: Rev-Expense=Net Income Operating Expense = $ 2, 266 C. Assume that instead of accurately estimating the anticipated reconstructing charging 2012 the company overestimated them by 30 million. How would this overestimation effect financial statements (1) 2012 and (2) 2013 when Severance costs are paid in cash? Income statement for the year 2012 million $ Balance as at Oct,31,2011 reconstruction charges cash payment no-cash settlement balance as at Oct,31,2012 813 2296 -840 -1212 1057 Income statement for the year 2013; assuming all other costs remain intact million $ Balance as at Oct,31,2012 1057 reconstruction charges 2326 cash payment -840 no-cash settlement -1212 balance as at Oct,31,2013 1331 D. The company reports the total charge will amount to 3.7 billion where is the 2012 income statement from this weekend why do investors care to know the total charge if it does not impact the current period Earnings? The total reconstruction cost is $3.7 billion. Nonetheless, the amount is expected to be paid over a three-year period. This means that the whole ransom will not be accounted for in 2012 but for each passing year, an amount will be spread as per the payment. In 2012 for instance, $2.1Billion is charged to the income statement, but some of the amounts, that is, $ 97 Million relates to the non-cash restructuring charges. The management of any firm is required to disclose any relevant information as pertains the company to all stakeholders even if current earnings are not affected as the value of the organization is impacted. Accounting 400 Midterm Exam February 24, 2017 (a) Compute net operating profit after tax (NOPAT) for 2012. Assume that the combined federal and statutory rate is: 37% NOPAT 2012 2011 Operating Income 2,670 2,828 Deduct Income Tax at 37% NOPAT 2670 x (1- 0.37) =1682 2828 x (1- 0.37) = 1782 (b) Compute net operating assets (NOA) for 2012 and 2011. Treat non-current investments as a no operating item. NOA= operating assets - operating liabilities Operating assets= total assets- investments Operating liabilities = Total liabilities-long term debt (LTD)-current portion of LTD 2012 Operating assets= 23329 2011 21539 Operating liabilities= 19757- 9966-5 4951-27-8 Net operating assets 16623 13,543 (c) Compute RNOA and dis aggregate it into net operating profit margin (NOPM) and net operating asset turnover (NOAT) for 2012. Confirm that RONA=NOPM X NOAT. The median NOPM and NOAT for companies in the packaged food industry (see Exhibit 4.4) is 5% and 2.1, respectively, yielding a median RNOA of 10.5%. Comment on NOPM and NOAT estimates for KFT in comparison to industry medians. RNOA = NOPAT / average NOA 2012 {1682 / 13,543} *100 2011 {1782 / 16623}*100 12.41% 10.72% Net operating Profit Margin (NOPM) = 2012 NOPAT / SALES 2011 1682 / 18655 1782 / 17797 0.09 *100 = 9% Net Operating Asset Turnover (NOAT) Sales / NOA RNOA = NOPM * NOAT 0.10 * 100 = 10% 2012 2011 18655 / 13,543 17797 / 16623 1.38 1.07 2012 2011 12.42% 10.72% Comparing the performance of KFT to the industry, the firm is doing relatively well. It's able to generate a good profit margin from its operations as well as use its assets to generate revenue; given that the values lie very close to the industry's mediums. (d) Compute net no operating obligations (NNO) for 2012 and 2011. Confirm the relation: NOA=NNO+ Stockholders equity. 2012 2011 Non-Operating Obligations (NNO) = Non-Operating Liabilities - Non Operating Assets Non-Operating Liabilities Current portion of LTD 5 8 Long Term Debts 9,966 27 Non-Operating Obligations (NNO) = 9,971 35 Stockholders' Equity 3,572 16,588 NOA 13,543 16623 (e) Compute return on equity (ROE) for 2012 2012 Net margin after tax / Shareholder`s Equity 45.97% 1642 / 3572 (f) Infer the non-operating return component of ROE for 2012 Non- Operating Return Component of ROE 2012 ROE 45.97% net income after tax / equity RNOA = net income before tax / total assets 12.33% 33.66% (g) Comment on the difference between ROE and RNOA. What does this relation suggest about Kraft`s use debt? Non-operating return component of ROE is higher than operating component which indicates that company is using higher debts as compared to equity and it is trading on equity. A. Briefly describe the company's 2012 reconstructing program. Provide two examples of common non-cash charges associated with corporate reconstructing activities. In 2012, HP Company adopted its cost-restructuring program with the aim of reducing 29,000 positions in the enterprise by the year 2014. This would see it incur an aggregate charge of $ 3.7Billion. Out of the $3.7 Billion total cost; $3.1 Billion was allocated to cover workforce costs where an enhanced early retirement scheme has also been established, and the remaining $0.6 being used in the data center and real estate consolidation. By the end of fiscal year, 2012 a charge of $2.1 Billion was recorded; $41Million used in stock-based compensation settlement while of the $105 million allocated to data center and real estate consolidation, $56 million was associated with assets impairment. On average $97 (41M+ 56M) million went to non-cash charges for the restructuring process. The most common noncash expenses associated with corporate restructuring include stock-based compensation and asset impairment. B. Using the financial statement effects template show the effects on financial statements on (1) 2012 reconstructing charge of 2,266 million (2) 2012 cash payment of 840 million. Balance Sheet: Cash Assets + Non-cash Assets = Liabilities + Contributed Capital + Earned Capital 1. Balance Sheet as at 2012 Assets Non-cash Asset $ 2, 266 total assets $ 2, 266 Restructuring Liability $ 2, 266 Liabilities Restructuring Liability total liabilities $ 2, 266 $ 2, 266 Liabilities Restructuring Liability cash total liabilities $ 1426 $ 840 $ 2, 266 2. Balance Sheet as at 2012 Assets Non-cash Asset total assets $ 2, 266 $ 2, 266 Income Statement: Rev-Expense=Net Income Operating Expense = $ 2, 266 C. Assume that instead of accurately estimating the anticipated reconstructing charging 2012 the company overestimated them by 30 million. How would this overestimation effect financial statements (1) 2012 and (2) 2013 when Severance costs are paid in cash? Income statement for the year 2012 million $ Balance as at Oct,31,2011 reconstruction charges cash payment no-cash settlement balance as at Oct,31,2012 813 2296 -840 -1212 1057 Income statement for the year 2013; assuming all other costs remain intact million $ Balance as at Oct,31,2012 1057 reconstruction charges 2326 cash payment -840 no-cash settlement -1212 balance as at Oct,31,2013 1331 D. The company reports the total charge will amount to 3.7 billion where is the 2012 income statement from this weekend why do investors care to know the total charge if it does not impact the current period Earnings? The total reconstruction cost is $3.7 billion. Nonetheless, the amount is expected to be paid over a three-year period. This means that the whole ransom will not be accounted for in 2012 but for each passing year, an amount will be spread as per the payment. In 2012 for instance, $2.1Billion is charged to the income statement, but some of the amounts, that is, $ 97 Million relates to the non-cash restructuring charges. The management of any firm is required to disclose any relevant information as pertains the company to all stakeholders even if current earnings are not affected as the value of the organization is impacted