Income statements and balance sheets follow for The New York Times Company. Refe
ID: 2450940 • Letter: I
Question
Income statements and balance sheets follow for The New York Times Company. Refer to these financial statements to answer the requirements.
A. Compute net operating profit after tax (NOPAT) for 2013 and 2012. Assume that combined federal and state statutory tax rates are 37% for both years.
B. Compute net operating assets (NOA) for 2013 and 2012.
C. Compute return on net operating assets (RNOA) for 2013 and 2012. Net operating assets are $412,630 thousand in 2011.
D. Compute return on common shareholders equity (ROE) for 2013 and 2012. Stockholders’ equity attributable to New York Times Company in 2011 is $506,360 thousand.
E. What is nonoperating return component of ROE for 2013 and 2012?
F. Comment on the difference between ROE and RNOA. What inference do you draw from this comparison?
Explanation / Answer
Solution:
(B). Net Operating Assets Caluculation:
2012 NOA = 25,,72,552 / 4,70,561
= 5.4669
2013 NOA = 28,07,470 / 5,91,117
= 4.749
(C). Return on Net Operating Assets:
2012 RNOA = 65,105 / 25,72,552 * 100
= 2.53
2013 RNOA = 1,35,847 / 28,07,470 * 100
= 4.83
(D). Return on Common Equity Shareholders:
2012 RECS = 65,105 - 0 / 12,86,276 * 100
= 5.06
2013 RECS = 1,35,847 / 14, 03, 735 * 100
= 9.67
(E). Return on Equity :
Return on Equity = 65,105 - 0 / 12,86,276 * 100
= 5.06
Return on Equity = 1,35,847 / 14, 03, 735 * 100
= 9.67
(F). Difference Between ROE and RNOA
2012 Year : = 5.06 ~ 2.53
= 2.53
2013 Year : = 9.67 ~ 4.83
= 4.84
NOA = Total Assets Used to Revenue Generated / Total Non-Cash Assets