Please provide solutions with steps. Analysis and Interpretation of Profitabilit

Question

Please provide solutions with steps.

Analysis and Interpretation of Profitability Balance sheets and income statements for Costco Wholesale Corportation follow. Consolidated Statements of Earnings September 1, 2013 September 2, 2012 August 28, 2011 For Fiscal Years Ended ($ millions) Revenue $102,870 2,286 105,156 Net Sales $97,062 $87,048 1,867 88,915 Membership fees 2,075 Total revenue 99,137 Operating expenses Merchandise costs Selling, general and administrative Preopening expenses 91,948 10,104 51 3,053 86,823 9,518 37 2,759 77,739 8,691 46 Operating Income 2,439 Other income (expense) (99) 97 3,051 990 2,061 (22) $2,039 (95) 103 2,767 1,000 1,767 (58) $1,709 Interest expense (116) Interest income and other, net 60 Income before income taxes 2,383 841 1,542 (80) $1,462 Provision for income taxes Net income including noncontrolling interests Net income attributable to noncontrolling interests Net income attributable to Costco

Explanation / Answer

Ans. (a)

NOPAT= Operating Profit*(1-tax rate)

3053*(1-0.37)

=$1923 Million

(b) Noa= Current asset- current Liabilty+ Non Current Asset- Non Current Liability

2013= 15840-13257+21584-4998-1016

=$18153 Million

2012= 13526-12260+20199-1381-981

=$19103 Million

(C) RNOA= NOPAT/Average NOA

average Noa=18153+19103/2

=18628

RNOA= 1923/18628

= $10.32%

NOPM

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