A. How do you interpret Net Opearting Profit after Tax for 2016 and 2015? What i

Question

A. How do you interpret Net Opearting Profit after Tax for 2016 and 2015? What is the performance on the calculations based on your analysis?

B. How do you interpret Net Opearting Assets for 2016 and 2015? What is the performance on the calculations based on your analysis?

C. How do you interpret Retun on Net Operating Assets for 2016 and 2015? What is the performance on the calculations based on your analysis?

D. How do you interpret Return on Equity for 2016 and 2015? What is the performance on the calculations based on your analysis?

a. 2016 2015 Income from operations $         20,182.00 $ 18,161.00 Provision for income taxes $            2,953.00 $    6,314.00 Other Income (expense) $             (431.00) $       346.00 a. NOPAT 2016 2015 20182-(2953+(431*.37)) $17,069.53 18161-(6314+(-346*0.37)) $ 11,975.02 b. 2016 2015 OPERATING ASSETS $         80,454.00 $ 77,946.00 OPERATING LIABILITIES $         61,569.00 $ 57,002.00 b. NOA 2016 2015 $         18,885.00 $ 20,944.00 c. 2016 2015 NOPAT $17,069.53 $ 11,975.02 Average NOA              19,914.50      23,832.00 RNOA 85.71% 50.25% d. 2016 2015 Net Income $         16,798.00 $ 12,193.00 Average Stockholders' Equity $         76,040.00 $ 84,933.50 ROE 22.09% 14.36%

Explanation / Answer

1:The NOPAT has increased from 2015. NOPAT is the potential earnings of the company if it had no debt. This implies that if there was no debt the company would have increased its performance and profitability.

2: NOA are net operating assets-liabilities. The average NOA of the business has reduced. This implies that the company has reduced its investment in Net operating assets which is good for the business.

3: RNOA has increased substantially. This means that the company has been able to derive more and more profits from its operating assets which is a positive indicator of the company’s performance.

4: ROE represents return on investment made by owners of the company. Since this return has increased, it implies that the company has been able to make more profits with lesser equity. This is a positive sign for the investors in the firm.

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