Hi Chegg, looking at the consolidated statements of earnings for Nordstrom, Inc.
ID: 2460824 • Letter: H
Question
Hi Chegg, looking at the consolidated statements of earnings for Nordstrom, Inc., can you please tell what is the non-operating profit before tax (NOPBT), pretax net nonoperating expense, and tax expense. Correct me if I am wrong, but I believe (interest expense, net) is the pretax net nonoperating expense and (income tax expense) is the tax expense. I believe NOPBT includes net sales, credit card revenues, cost of sales and related buying and occupancy costs, but I am not sure if it includes retail and credit. I am not 100% sure if I am right, so please help me for all three. It would help me a lot.
Nordstrom, Inc.
Consolidated Statements of Earnings
For Fiscal Years Ended ($ millions)
2013
2012
2011
Net Sales
$11,762
$10,497
$9,310
Credit card revenues
386
380
390
Total revenues
12,148
10,877
9,700
Cost of sales and related buying and occupancy costs
(7,432)
(6,592)
(5,897)
Selling, general and administrative expenses
Retail
(3,166)
(2,807)
(2,412)
Credit
(205)
(229)
(273)
Earnings before interest and income taxes
1,345
1,249
1,118
Interest expense, net
(160)
(130)
(127)
Earnings before income taxes
1,185
1,119
991
Income tax expense
(450)
(436)
(378)
Net earnings
$ 735
$ 683
$ 613
Nordstrom, Inc.
Consolidated Statements of Earnings
For Fiscal Years Ended ($ millions)
2013
2012
2011
Net Sales
$11,762
$10,497
$9,310
Credit card revenues
386
380
390
Total revenues
12,148
10,877
9,700
Cost of sales and related buying and occupancy costs
(7,432)
(6,592)
(5,897)
Selling, general and administrative expenses
Retail
(3,166)
(2,807)
(2,412)
Credit
(205)
(229)
(273)
Earnings before interest and income taxes
1,345
1,249
1,118
Interest expense, net
(160)
(130)
(127)
Earnings before income taxes
1,185
1,119
991
Income tax expense
(450)
(436)
(378)
Net earnings
$ 735
$ 683
$ 613
Explanation / Answer
Net Operating Profit Before Tax refers to the income after deducting for operating expenses but before deducting for income taxes and interest. in the above case this is EBIT (Earnings Before Interest & Income Tax)
2011 = $1118
2012 = $1249
2013 = $1345
Non operating expenses are those expenses that are not directly related to running of business. This shall include interest expense. Pre tax non operating expenses are:
2011 = $127
2012 = $130
2013 = $160
Tax expense is the Income Tax:
2011 = $378
2012 = $436
2013 = $450