Use following information to calculate Return on Net Operating Assets (RNOA) for

Question

Use following information to calculate Return on Net Operating Assets (RNOA) for Walmart for 2011:

Calculate Return on Net Operating Assets (RNOA) for Walmart for 2011:

15.63%

12.87%

4.78%

9.09%

16.43%

Walmart INCOME STATEMENT 2010 2011 TOTAL REVENUE 421,849 OPERATING EXPENSES 396,307 OPERATING PROFIT (EBIT) 25,542 Non-operating Expenses(Net Interest expense) 2,004 TAXABLE PROFIT (EBT) 23,538 Tax 7,579 NET INCOME FROM CONTINUED OPERATIONS 15,959 BALANCE SHEET 2010 2011 AVERAGE OPERATING ASSETS 162,360 173,137 167,749 NON-OPERATING ASSETS 8,047 7,526 7,787 TOTAL ASSETS 170,407 180,663 175,535 OPERATING LIABILITY 56,040 59,097 57,569 NON-OPERATING LIABILITY 41,719 50,319 46,019 SH EQUITY 72,648 71,247 71,948 TOTAL LIAB + EQUITY 170,407 180,663 175,535

Explanation / Answer

Average Operating Asset = $167,749

Average non-Operating Asset = $7,787

Average total Assets = $175,535

Net Income = $15,959

Return on Net Operating Assets (RNOA) is calculated below using following formula:

RNOA = Net Income / (Average Operating Asset + Average non-Operating Asset)

              = $15,959 / ($167,749 + $7,787)

              = $15,959 / $175,535

              = 9.09%

Return on Net Operating Assets (RNOA) is 9.09%

Hence, option (D) is correct answer.

Related Questions

Navigate

• Browse (All)
• Browse U
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.