Question
Selected balance sheet and income statement information from Illinois Tool Works follows. $ millions201920182017Net operating profit after tax (NOPAT)$2,897$3,009Net income2,7982,845Total assets15,67115,465$17,451Equity3,1473,3843,384Net operating profit after tax
Selected balance sheet and income statement information from Illinois Tool Works follows.
$ millions201920182017Net operating profit after tax (NOPAT)$2,897$3,009Net income2,7982,845Total assets15,67115,465$17,451Equity3,1473,3843,384Net operating profit after tax (NOA)9,2249,84010,493Treasury stock21,07019,47517,274
a. Compute profitability measures: RNOA, ROA and ROE for 2019 and 2018 using the numbers as reported by the company.
Note:Round answers to one decimal place (ex: 0.2345 = 23.5%).
Metric20192018RNOAAnswer
Answer
ROAAnswer
Answer
ROEAnswer
Answer
b. Adjust equity and total assets for the amount of treasury stock.
$ millions201920182017Assets, restatedAnswer
Answer
Answer
Equity, restatedAnswer
Answer
Answer
Using these restated numbers, recompute RNOA, ROA and ROE for both years.
Note:Round answers to one decimal place (ex: 0.2345 = 23.5%).
Metric20192018RNOAAnswer
Answer
ROAAnswer
Answer
ROEAnswer
Answer
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Management Accounting
Authors: Charles T. Horngren, Gary L. Sundem, William O. Stratton, Phillip Beaulieu
6th Canadian edition
013257084X, 1846589207, 978-0132570848
