Selected balance sheet and income statement information from Abercrombie \& Fitch Co. and TJX Companies, Inc., clothing retailers in the high-end and value-priced segments, respectively, follows.

a. Compute the 2013 return on net operating assets (RNOA) for both companies.

b. Disaggregate RNOA into net operating profit margin (NOPM) and net operating asset turnover (NOAT) for each company. Confirm that RNOA \(=\) NOPM \(\times\) NOAT.

c. Discuss differences observed with respect to NOPM and NOAT and interpret those differences in light of each company's business model.

Transcribed Image Text:

Company ($ millions) Abercrombie & Fitch... TJX Companies.... .... Ticker ANF TJX 2013 Sales $ 4,511 25,878 2013 NOPAT $242 1,925 2013 Net Operating Assets $1,446 2,393 2012 Net Operating Assets $1,545 2,395