Question: Discuss the motivation for excluding nonproductive assets from invested capital
Discuss the motivation for excluding “nonproductive” assets from invested capital when computing return. What circumstances justify excluding intangible assets from invested capital?
Answer to relevant QuestionsWhat is the relation between return on net operating assets and sales? Consider both NOPAT sales and sales to net operating assets in your response.a. Equity turnover is sales divided by average shareholders’ equity. What does equity turnover measure? How is it related to return on common equity? b.“Growth in earnings per share from an increase in equity turnover is ...Selected financial information from Syntex Corporation is reproduced below:1. NOA turnover (average NOA equals ending NOA) is 2.2. NOPAT margin equals 5%.3. Leverage ratio (average NFO/average common equity) is 1.786, and ...1. Which of the following situations best correspond with a ratio of “sales to average net tangible assets” exceeding the industry norm? (Choose one answer.)a. A company expanding plant and equipment during the past ...Selected data from Kemp Corporation are reproduced below:Required:a. For Year 4, compute the following ratios:(1) Inventory/Sales.(2) Inventory/Income contribution.b. Compute the percentage of each product line’s income ...
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