Required a. Compute net operating profit after tax (NOPAT) for 2016.Assume that the combined federal and state statutory tax rate is 37%. b. Compute net operating assets (NOA) for 2016 and 2015. c. Compute and disaggregate Costcos RNOA into net operating profit margin (NOPM) and net operating asset turnover (NOAT) for 2016; confirm that RNOA NOPM NOAT. d. Compute net nonoperating obligations (NNO) for 2016 and 2015. Confirm the relation: NOA NNO 1 Total equity. e. Compute return on equity (ROE) for 2016. f. Infer the nonoperating return component of ROE for 2016. 3. Comment on the difference between ROE and RNOA. What does this relation suggest about Costcos use of equity capital

P3-51. Analysis and Interpretation of Liquidity and Solvency Refer to the financial information of Costco Wholesale Corporation in P3-50 to answer the following requirements. Required a. Compute Costcos current ratio and quick ratio for 2016 and 2015. Comment on any observed trends. b. Compute Costcos times interest earned and its liabilities-to-equity ratios for 2016 and 2015. Comment on any noticeable change. c. Summarize your findings about the companys liquidity and solvency. Do you have any concerns about Costcos ability to meet its debt obligations? P3-52. Direct Computation of Nonoperating Return Refer to the financial information of Costco Wholesale Corporation in P3-50 to answer the following requirements. Required a. Compute Costcos financial leverage (FLEV), Spread, and noncontrolling interest (NCI) ratio for 2016; recall, NNE NOPAT Net income. b. Assume that Costcos return on equity (ROE) for 2016 is 20.71% and its return on net operating assets (RNOA) is 20.66%. Confirm computations to yield the relation: ROE [RNOA 1 (FLEV Spread)] NCI ratio. c. What do your computations of the nonoperating return in parts a and b imply about the companys use of borrowed funds

P3-53. Analysis and Interpretation of Profitability Balance sheets and income statements for Under Armour Inc. are found in P3-47. Use these financial statements to answer the requirements. Required a. Compute net operating profit after tax (NOPAT) for 2015.Assume that the combined federal and state statutory tax rate is 37%. b. Compute net operating assets (NOA) for 2015 and 2014. c. Compute RNOA and disaggregate it into net operating profit margin (NOPM) and net operating asset turnover (NOAT) for 2015. Comment on the drivers of RNOA. d. Compute return on equity (ROE) for 2015. e. Comment on the difference between ROE and RNOA. What does this relation suggest about Under Armours use of debt? P3-54. Compute ROE and Nonoperating Return Refer to the balance sheets and income statement for Under Armour Inc. in P3-47. Use these financials to answer the requirements. For the 2015 fiscal year, Under Armour had a return on net operating assets (RNOA) of 15.17%. a. Compute ROE. b. Compute net nonoperating obligations (NNO). c. Compute FLEV and Spread. d. Show that ROE RNOA 1 (FLEV Spread). e. What is the nonoperating return for the year? What does this suggest about Under Armours use of debt?

Financial Statement Analysis Val x + - C File | C:/Users/quykimdang/Downloads/Financial%20Statement%20Analysis%20%20Valuation%20by%20Easton-Acct%20460-1%20(2).pdf of ? E Contents 178 of 925 Q (L Page view A Read aloud Draw Highlight Erase 0] 3-55 Module 31 Profitability Analysis and Interpretation LO4, 5, 6, 7 P3-50. Analysis and Interpretation of Profitability Balance sheets and income statements for Costco Wholesale Corporation follow. COSTCO WHOLESALE CORPORATION (COST) Homewert ( COSTCO WHOLESALE CORPORATION Consolidated Statements of Income Aug. 28, Aug. 30, Aug. 31, For Fiscal Years Ended ($ millions) 2016 2015 2014 Revenue Net sales ... $116,073 $113,666 $110,212 Membership fees 2,646 2,533 2,428 Total revenue 118,719 116,199 112,640 Operating expenses Merchandise costs 102,901 101,065 98,458 Selling, general and administrative. 12,068 11,445 10,899 Preopening expenses. 78 65 63 Operating income 3,672 3,624 3,220 Other income (expense) Interest expense... (133) (124) (113) Interest income and other, net 80 104 90 Income before taxes 3,619 3,604 3,197 Provision for income taxes 1,243 1,195 1,109 Net income including noncontrolling interests 2,376 2,409 2,088 Net income attributable to noncontrolling interests (26) (32) (30) Net income attributable to Costco $ 2,350 $ 2,377 $ 2,058 COSTCO WHOLESALE CORPORATION Consolidated Balance Sheets Aug. 28, 2016 Aug. 30, 2015 $ millions, except par value and share data Annata It Type here to search o ini 64F Clear ^ 37 9:45 PM 9/17/2021 Financial Statement Analysis Vall X + - C File | C:/Users/quykimdang/Downloads/Financial%20Statement%20Analysis%20%20Valuation%20by%20Easton-Acct%20460-1%20(2).pdf of 17 E Contents 178 of 925 Q IL Page view A Read aloud Draw V Highlight Erase 0] COSTCO WHOLESALE CORPORATION Consolidated Balance Sheets Aug. 28, 2016 Aug. 30, 2015 $ millions, except par value and share data Assets Current assets Cash and cash equivalents. Short-term investments Receivables, net Merchandise inventories. Other current assets $ 3,379 $ 4,801 1,350 1,618 1,252 1,224 8,969 8,908 268 228 Total current assets. 15,218 16,779 811 Property and equipment Land..... Buildings and improvements. Equipment and fixtures. Construction in progress. Gross property and equipment. .. Less accumulated depreciation and amortization. Net property and equipment. Other assets 5,395 4,961 13,994 12,618 6,077 5,274 701 26,167 23,664 (9,124) 17,043 15,401 . 902 837 (8,263) Total assets. $33,163 $33,017 continued It Type here to search o j 02 C 64F Clear 9:45 PM 9/17/2021 37 Financial Statement Analysis Vall X + - c File C:/Users/quykimdang/Downloads/Financial%20Statement%20Analysis%20%20Valuation%20by%20Easton, Acct%20460-1%20(2).pdf o? 17 = Contents 179 of 925 Q IL Page view A Read aloud Draw Highlight Erase G Aug. 28, 2016 Aug. 30, 2015 $ millions, except par value and share data Liabilities and equity Current liabilities Accounts payable... Current portion long-term debt. Accrued salaries and benefits Accrued member rewards.. Deferred membership fees Other current liabilities. Total current liabilities Long-term debt, excluding current portion. Other liabilities. $ 7,612 $ 9,011 1,100 1,283 2,629 2,468 869 813 1,362 1,269 2,003 15,575 16,539 4,061 4,852 1,195 20,831 22,174 1,695 783 Total liabilities. . Equity Preferred stock, $0.005 par value: 100,000,000 shares authorized; no shares issued and outstanding. Common stock, $0.005 par value: 900,000,000 shares authorized; 437,524,000 and 437,952,000 shares issued and outstanding. Additional paid-in-capital. ... Accumulated other comprehensive loss Retained earnings. ... Total Costco stockholders' equity Noncontrolling interests Total equity.. Total liabilities and equity. 6,518 22 5,490 5,218 (1,099) (1,121) 7,686 12,079 10,617 253 12,332 10,843 $33,163 $33,017 226 Required a.Compute net operating profit after tax (NOPAT) for 2016. Assume that the combined federal and state statutory tax rate is 37%. b.Compute net operating assets (NOA) for 2016 and 2015. c.Compute and disaggregate Costco's RNOA into net operating profit margin (NOPM) and net operat- ing asset turnover (NOAT) for 2016, confirm that RNOA - NOPM X NOAT. sito at nantie oblication. (NNO) for 2016 and 2015 Confis the slation. NOA NINIO 0 It Type here to search Di 64F Clear AOC 37 ) 9:47 PM 9/17/2021 Financial Statement Analysis Val x + - C File | C:/Users/quykimdang/Downloads/Financial%20Statement%20Analysis%20%20Valuation%20by%20Easton-Acct%20460-1%20(2).pdf of ? E Contents 178 of 925 Q (L Page view A Read aloud Draw Highlight Erase 0] 3-55 Module 31 Profitability Analysis and Interpretation LO4, 5, 6, 7 P3-50. Analysis and Interpretation of Profitability Balance sheets and income statements for Costco Wholesale Corporation follow. COSTCO WHOLESALE CORPORATION (COST) Homewert ( COSTCO WHOLESALE CORPORATION Consolidated Statements of Income Aug. 28, Aug. 30, Aug. 31, For Fiscal Years Ended ($ millions) 2016 2015 2014 Revenue Net sales ... $116,073 $113,666 $110,212 Membership fees 2,646 2,533 2,428 Total revenue 118,719 116,199 112,640 Operating expenses Merchandise costs 102,901 101,065 98,458 Selling, general and administrative. 12,068 11,445 10,899 Preopening expenses. 78 65 63 Operating income 3,672 3,624 3,220 Other income (expense) Interest expense... (133) (124) (113) Interest income and other, net 80 104 90 Income before taxes 3,619 3,604 3,197 Provision for income taxes 1,243 1,195 1,109 Net income including noncontrolling interests 2,376 2,409 2,088 Net income attributable to noncontrolling interests (26) (32) (30) Net income attributable to Costco $ 2,350 $ 2,377 $ 2,058 COSTCO WHOLESALE CORPORATION Consolidated Balance Sheets Aug. 28, 2016 Aug. 30, 2015 $ millions, except par value and share data Annata It Type here to search o ini 64F Clear ^ 37 9:45 PM 9/17/2021 Financial Statement Analysis Vall X + - C File | C:/Users/quykimdang/Downloads/Financial%20Statement%20Analysis%20%20Valuation%20by%20Easton-Acct%20460-1%20(2).pdf of 17 E Contents 178 of 925 Q IL Page view A Read aloud Draw V Highlight Erase 0] COSTCO WHOLESALE CORPORATION Consolidated Balance Sheets Aug. 28, 2016 Aug. 30, 2015 $ millions, except par value and share data Assets Current assets Cash and cash equivalents. Short-term investments Receivables, net Merchandise inventories. Other current assets $ 3,379 $ 4,801 1,350 1,618 1,252 1,224 8,969 8,908 268 228 Total current assets. 15,218 16,779 811 Property and equipment Land..... Buildings and improvements. Equipment and fixtures. Construction in progress. Gross property and equipment. .. Less accumulated depreciation and amortization. Net property and equipment. Other assets 5,395 4,961 13,994 12,618 6,077 5,274 701 26,167 23,664 (9,124) 17,043 15,401 . 902 837 (8,263) Total assets. $33,163 $33,017 continued It Type here to search o j 02 C 64F Clear 9:45 PM 9/17/2021 37 Financial Statement Analysis Vall X + - c File C:/Users/quykimdang/Downloads/Financial%20Statement%20Analysis%20%20Valuation%20by%20Easton, Acct%20460-1%20(2).pdf o? 17 = Contents 179 of 925 Q IL Page view A Read aloud Draw Highlight Erase G Aug. 28, 2016 Aug. 30, 2015 $ millions, except par value and share data Liabilities and equity Current liabilities Accounts payable... Current portion long-term debt. Accrued salaries and benefits Accrued member rewards.. Deferred membership fees Other current liabilities. Total current liabilities Long-term debt, excluding current portion. Other liabilities. $ 7,612 $ 9,011 1,100 1,283 2,629 2,468 869 813 1,362 1,269 2,003 15,575 16,539 4,061 4,852 1,195 20,831 22,174 1,695 783 Total liabilities. . Equity Preferred stock, $0.005 par value: 100,000,000 shares authorized; no shares issued and outstanding. Common stock, $0.005 par value: 900,000,000 shares authorized; 437,524,000 and 437,952,000 shares issued and outstanding. Additional paid-in-capital. ... Accumulated other comprehensive loss Retained earnings. ... Total Costco stockholders' equity Noncontrolling interests Total equity.. Total liabilities and equity. 6,518 22 5,490 5,218 (1,099) (1,121) 7,686 12,079 10,617 253 12,332 10,843 $33,163 $33,017 226 Required a.Compute net operating profit after tax (NOPAT) for 2016. Assume that the combined federal and state statutory tax rate is 37%. b.Compute net operating assets (NOA) for 2016 and 2015. c.Compute and disaggregate Costco's RNOA into net operating profit margin (NOPM) and net operat- ing asset turnover (NOAT) for 2016, confirm that RNOA - NOPM X NOAT. sito at nantie oblication. (NNO) for 2016 and 2015 Confis the slation. NOA NINIO 0 It Type here to search Di 64F Clear AOC 37 ) 9:47 PM 9/17/2021