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

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

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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