Projecting NOPAT and NOA Using Parsimonious Forecasting Method Assume the follow

Question

Projecting NOPAT and NOA Using Parsimonious Forecasting Method

Assume the following are 3M's sales, net operating profit after tax (NOPAT), and net operating assets (NOA) for its fiscal year ended 2010 ($millions).

Forecast 3M's sales, NOPAT and NOA for fiscal years 2011 through 2014 using the following assumptions:

0.00 points out of 1.00

*Use Sales - rounded nearest whole number to calculate NOPAT and NOA.

Sales $24,422 Net operating profit after tax (NOPAT) 4,251 Net operating assets (NOA) 15,430

Explanation / Answer

Formulas to use are:

Sales = previous year sale x 1.087

NOPAT= sales for the year x 0.152

NOA= Sales for the year / 1.7

The following table represents the answers (all amount is in $)-

(All amounts in $) FY2010 FY2011 FY2012 FY2013 FY2014 Sales (rounded 2 decimal) 24422 26546.71 28856.28 31366.77 34095.68 Sales (rounded whole number) 24422 26547 28856 31367 34096 NOPAT (rounded whole number) 4251 4035 4386 4768 5183 NOA (rounded whole number) 15430 15616 16974 18451 20056

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