Compute and Interpret RNOA, Profit Margin, and Asset Turnover of Competitors

Compute and Interpret RNOA, Profit Margin, and Asset Turnover of Competitors CVS Health Corp. and Walgreens Boots Alliance follow

<strong>Compute and Interpret RNOA, Profit Margin, and Asset Turnover of Competitorsstrong>

Selected balance sheet and income statement information for drug store retailers CVS Health Corp. and Walgreens Boots Alliance follows.

2015 Net 2014 Net
2015 Operating Operating
Company ($ millions) Ticker 2015 Sales NOPAT Assets Assets
CVS Health CVS $157,734 $5,991 $62,825 $48,338
Walgreens Boots Alliance WBA 107,888 3,875 43,349 22,461

 

(A) Compute the 2015 return on net operating assets (RNOA) for each company.

Round answers to two decimal places (ex: 0.12345 = 12.35%)

RNOA
CVS Health Answer 10.78%
Walgreens Answer 11.78%

 

(B) Disaggregate RNOA into net operating profit margin (NOPM) and net operating asset turnover (NOAT) for each company.

Round answers to two decimal places (ex: 0.12345 = 12.35%)

NOPM NOAT
CVS Health Answer 3.8% Answer 2.84 %
Walgreens Answer 3.59 % Answer 3.28%

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