Interpret the results below in both a time-series and cross-sectional manner (by separating the operating drivers...
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Interpret the results below in both a time-series and cross-sectional manner (by separating the operating drivers of ROE from the financial drivers of ROE). RATIO ANALYSIS LOCKHEED 2021 Profitability analysis: decomposing ROE using the Alternative approach Net operating profit margin (NOPAT margin) Net operating assets turnover (NOA t/01 Operating return on assets (OROA=NOPAT margin *NOA t/0) Effective interest rate after tax (= Net interest expense after tax/Average Net debt) Spread-OROA-effective interest rate after tax Net Financial Leverage (= Average Net debt/Average Equity) ROE-OROA+(Spread* Net Financial Leverage 8.7156 2.43 21.13% -2.49% 23.62% 2.25 74.31% LOCKHEED 2020 LOCKHEED 2019 Northrop 2021 Northrop 2020 Northrop 2019 9.6996 2.36 22.90% -2.1456 25.03% 5.02 148.65% 17.74% 1.38 24.40% -4.7796 29.1796 1.21 59.60% 6.82% 1.40 9.5296 4.07% 13.59% 1.72 32.88% Interpret the results below in both a time-series and cross-sectional manner (by separating the operating drivers of ROE from the financial drivers of ROE). RATIO ANALYSIS LOCKHEED 2021 Profitability analysis: decomposing ROE using the Alternative approach Net operating profit margin (NOPAT margin) Net operating assets turnover (NOA t/01 Operating return on assets (OROA=NOPAT margin *NOA t/0) Effective interest rate after tax (= Net interest expense after tax/Average Net debt) Spread-OROA-effective interest rate after tax Net Financial Leverage (= Average Net debt/Average Equity) ROE-OROA+(Spread* Net Financial Leverage 8.7156 2.43 21.13% -2.49% 23.62% 2.25 74.31% LOCKHEED 2020 LOCKHEED 2019 Northrop 2021 Northrop 2020 Northrop 2019 9.6996 2.36 22.90% -2.1456 25.03% 5.02 148.65% 17.74% 1.38 24.40% -4.7796 29.1796 1.21 59.60% 6.82% 1.40 9.5296 4.07% 13.59% 1.72 32.88%
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Lets interpret the results provided in both a timeseries and crosssectional manner TimeSeries Analysis 1 Net Operating Profit Margin NOPAT Margin The NOPAT margin measures the profitability of the com... View the full answer
Related Book For
Entrepreneurial Finance
ISBN: 978-0538478151
4th edition
Authors: J . chris leach, Ronald w. melicher
Posted Date:
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