Use following information to calculate Net Operating Profit After Tax (NOPAT) fo

Question

Use following information to calculate Net Operating Profit After Tax (NOPAT) for Walmart for 2011:

Calculate Net Operating Profit After Tax (NOPAT) for Walmart for 2011:

$16,487

$12,976

$17,222

$13,987

$29,435

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

Tax rate = 7579/23538*100                  = 32.2% NOPAT = EBIT * ( 1- Tax rate)                = 25542 * 67.8%                 = 17222 hence option C is correct

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