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% |