Requirements

Part $1$

a$)$ Compute net operating profit after tax $($NOPAT$)$ for $2021.$ Assume that the combined federal and state statutory tax rate is $22\%$

b$)$ Compute net operating assets $($NOA$)$ for $2021$ and $2020$

c$)$ Compute and disaggregate RNOA into net operating profit margin $($NOPM$)$ and net operating asset turnover $($NOAT$)$ for $2021$; confirm that RNOA $=$ NOPM $$ NOAT

d$)$ Compute net operating obligatoins $($NNO$)$ for $2021$ and $2020.$ Confirm the relation: NOA $=$ NNO $+$ Total equity

e$)$ Compute return on equity $($ROE$)$ and Return on Assets $($ROA$)$ for $2021$ ONLY.

f$)$ Infer the nonoperating return component of ROE for $2021.$

g$)$ Comment on the difference between ROE and RNOA. What does this relation suggest about the use of equity capital?

h$)$ Compute current ratio and quick ratio for $2021$ and $2020.$

i$)$ Compute times interest earned and liabilities$-$to$-$equity ratios for $2021$ and $2020.$ In $2020,$ CEH Industries reported earnings before interest and tax $($EBIT$)$ of $$4,111$ million and interest expense of $$134$ million

i$)$ Summarize your findings about the company's liquidity and solvency. Do you have any concerns about CEH Industries' ability to meet its debt obligations?

k$)$ Confirm that ROE equals ROE computed using the component measures for profit margin, assets turnover, and financial leverage: ROE $=$ PM $x$ AT $x$ FL

I$)$ Compute adjusted ROA $($assume a statutory tax rate of $22\%)$