Compute, Disaggregate and Interpret ROE and RNOA Selected balance sheet and income statement information from Macy’s Inc. follows ($ millions). (Perform the required computations from the perspective of Macy’s shareholders.)

Company Ticker 2015 Sales 2015 Net Income 2015 Net Operating Profit After Tax 2015 Net Operating Assets 2014 Net Operating Assets 2015 Stockholders’

Equity 2014 Stockholders’

Equity Macy’s . . . M $27,079 $1,072 $1,297 $10,781 $10,441 $4,250 $5,378 a???? Compute the 2015 return on equity (ROE) and 2015 return on net operating assets (RNOA).

b???? Disaggregate RNOA into net operating profit margin (NOPM) and net operating asset turnover

(NOAT). What observations can we make about Macy’s NOPM and NOAT?

c???? Compute the percentage of RNOA to ROE, and compute Macy’s nonoperating return for 2015.