Question: Explain why operating liabilities might lever up the return on net operating assets.

Explain why operating liabilities might lever up the return on net operating assets.

Step by Step Solution

★★★★★

3.41 Rating (176 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock

If a firm can generate income ... View full answer

blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Document Format (1 attachment)

Word file Icon

99-B-A-F-A (329).docx

120 KBs Word File

Students Have Also Explored These Related Accounting Questions!

Q:

Explain why borrowing might lever up the return on common equity.

Q:

The higher the anticipated return on net operating assets (RNOA) relative to the anticipated growth in net operating assets, the higher will be the unlevered price-to- book ratio. Is this correct?

Q:

A firm with a current return on net operating assets of 15 percent anticipates growth insalesof6 percent per year from its current net operating asset base of $498 million. It also anticipates that...

Q:

The return on net operating assets or RNOA is a performance ratio is calculated by dividing net operating profits by net operating assets. It represents the ability of a company to generate income...

Q:

I am trying to identify the Non operating assets and non operating liabilities so that i can calculate the net operating assets (NOA). I have been given the following balance sheet. Identify and...

Q:

C11.5. Explain why operating liabilities might lever upthereturn onnetoperating assets.

Q:

The exercise continues Exercise 9.5 in Chapter 9. The following financial statement were reported for a firm for fiscal year 2009 (in millions of dollars): The firm's income tax rate is 35%. The firm...

Q:

E11.3. Reformulation and Analysis of Financial Statements (Medium) This exercise continues Exercise 9.5 in Chapter 9. The following financial statements were reported for a firm for fiscal year 2009...

Q:

Which statement is TRUE? A. The two components of RNOA, net operating profit margin and NOA turnover, are independent of each other. B. A decrease in net operating profit margin will cause both...

Q:

Which of the following will cause an increase in net operating income ( NOPAT ) ? Increase in the return on net operating assets Decrease in the return on net operating assets No change in the return...

Q:

QUESTION 3 (a) Write the truth table for a 4-bit gray to binary code converter in Figure 3 (i). G3 G2 B2 G, B, Go Figure 3 (i) (b) A gray code to 7-segment display decoder in Figure 3 (i) is to be...

Q:

How does strategic management differ in for-profit and nonprofit organizations?

Q:

The increasing amount of fringe benefits has focused the attention of ac- countants on these costs. One of the principal costs is that of pension plans. (a) Distinguish between "pay-as-you-go" and...

Q:

Explain any remedies which are available to a person who sells goods to a rogue who buys the goods with a bad cheque whilst using a false identity.

Q:

8. [Effect of lease capitalization on ratios] Exhibit 11P-1 pre- sents selected 1999 financial data provided by The Limited [LTD]. (Note. Use 6% as the appropriate interest rate for pre- sent-value...

Q:

d. Describe the adjustment to the company's 1999 free cash flows that should be made for the capital lease. e. Assuming that the lease was reported as an operating lease, determine. (i) Lease expense...

Q:

c. Explain how the capital lease affected the 1999 cash flow statement.

Q:

An overwhelming majority of voters favor legalizing recreational marijuana in North Dakota, according to an Inforum poll conducted this week. The online poll showed 514 of 624 poll-takers, or 82.4...

Q:

As a financial analyst at Deutsche Bank, you are analyzing the after tax returns for your client. Suppose your client bought a share of stock of AMD at $60, a share of stock Oracle at $70, and a...

Q:

19. More on the time value of money Lloyd is a divorce attorney who practices law in Florida. He wants to join the American Divorce Lawyers Association (ADLA), a professional organization for divorce...