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% |