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Selected Income Statement Information For 2018 Is Presented Below For Home Depot Inc. and Lowe's Companies Inc. Assume The Statutory Tax Rate Is 22%

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David Rolando García Opazo

The document provides financial information for Home Depot and Lowe's for 2018. It includes sales, pretax net income, nonoperating expenses, tax expenses, and average net assets. It asks to calculate net operating profit, return on net operating assets, net operating profit margin, and net operating asset turnover for each company and indicate which company performs better on each measure.

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Selected Income Statement Information For 2018 Is Presented Below For Home Depot Inc. and Lowe's Companies Inc. Assume The Statutory Tax Rate Is 22%

Uploaded by

David Rolando García Opazo
19 views1 page
The document provides financial information for Home Depot and Lowe's for 2018. It includes sales, pretax net income, nonoperating expenses, tax expenses, and average net assets. It asks to calculate net operating profit, return on net operating assets, net operating profit margin, and net operating asset turnover for each company and indicate which company performs better on each measure.

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The document provides financial information for Home Depot and Lowe's for 2018. It includes sales, pretax net income, nonoperating expenses, tax expenses, and average net assets. It asks to calculate net operating profit, return on net operating assets, net operating profit margin, and net operating asset turnover for each company and indicate which company performs better on each measure.

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© All Rights Reserved
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19 views1 page

Selected Income Statement Information For 2018 Is Presented Below For Home Depot Inc. and Lowe's Companies Inc. Assume The Statutory Tax Rate Is 22%

Uploaded by

David Rolando García Opazo
The document provides financial information for Home Depot and Lowe's for 2018. It includes sales, pretax net income, nonoperating expenses, tax expenses, and average net assets. It asks to calculate net operating profit, return on net operating assets, net operating profit margin, and net operating asset turnover for each company and indicate which company performs better on each measure.

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4/3/22, 3:52 PM A3

Question 3 Correct Mark 10.00 out of 10.00

Compute NOPAT
Selected income statement information for 2018 is presented below for Home Depot Inc. and Lowe’s Companies Inc. Assume the statutory tax
rate is 22%.

Pretax Net Average Net


Nonoperating Tax Operating
Company ($ millions) Ticker Sales NOPBT Expense Expense Assets
Home Depot HD $108,203 $15,530 $974 $3,435 $25,217
Lowe’s LOW 71,309 4,018 624 1,080 20,326

a. Compute the following measures for both companies.

Measure Rounding Instructions Home Depot Lowe’s


1. Net operating profit (NOPAT) Round to nearest whole dollar $ 11,881  $ 2,801 
2. Return on net operating assets (RNOA) Round percentage to one decimal place 47.1 %  13.8 % 
3. Net operating profit margin (NOPM) Round percentage to one decimal place 11 %  3.9 % 
4. Net operating asset turnover (NOAT) Round amount to two decimal places 4.29  3.51 

b. Indicate which of these two companies:

1. Is more profitable (in $s). Home Depot 


2. Produces the higher profit margin (in %). Home Depot 
3. Uses its NOA more efficiently. Home Depot 
4. Produces the higher return on NOA. Home Depot 

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