Question: Computing, Analyzing, and Interpreting Return on Equity and Return on Assets Following are summary financial statement data for Nordstrom Inc. for fiscal years ended 2017

Computing, Analyzing, and Interpreting Return on Equity and Return on Assets Following are summary financial statement data for Nordstrom Inc. for fiscal years ended 2017 through 2019. $ thousands $16,494 $16,097 $15,347 2019 2018 2017 Sales Net income 649 503 407 Total assets 8.359 8,602 1,016 8,329 905 Equity 908 a. Compute the return on assets (ROA) for fiscal years ended 2019 and 2018. Round answers to one decimal place (ex: 0.2345 = 23.5%). 2019 2018 96 96 b. Compute the profit margin (PM) for fiscal years ended 2019 and 2018. Round answers to one decimal place (ex: 0.2345 = 23.5%). 2019 2018 96 96 C. Compute the asset turnover (AT) for fiscal years ended 2019 and 2018. Round answers to two decimal places. 2019 2018 d. Which component of ROA (profit margin or asset turnover or both) drives the change in ROA in fiscal year ended 2019? e. Compute the return on equity (ROE) for fiscal years ended 2019 and 2018. Round answers to one decimal place (ex: 0.2345 = 23.5%). 2019 2018 96 96 f. Nordstrom has a large negative balance in retained earnings (a retained deficit). How does this affect the company's ROE: does it increase it or decrease it
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
