Identifying and Computing ROPI Model Inputs

Following are the balance sheets and statement of earnings for Home Depot Inc. for fiscal year ended February $3,2019,$ which the company labels fiscal year $2018.$

Note: Complete the entire question in Excel and format each answer to two decimal places. Then enter the answers into the provided spaces below with two decimal places.

THE HOME DEPOT INC.

Consolidated Balance Sheets

February $3,$ January $28,$

$ millions, except par value $20192018$

Assets

Current assets

Cash and cash equivalents $$2,045$ $$4,134$

Receivables, net $1,9361,952$

Merchandise inventories $16,01414,660$

Other current assets $890638$

Total current assets $20,88521,384$

Net property and equipment $22,37522,075$

Goodwill $2,5902,616$

Other assets $8471,246$

Total assets $$46,697$ $$47,321$

Liabilities and Stockholders$$ Equity

Current liabilities

Short$-$term debt $$1,540$ $$1,793$

Accounts payable $8,9188,331$

Accrued salaries and related expenses $1,7321,886$

Sales taxes payable $754598$

Deferred revenue $2,0492,076$

Income taxes payable $1362$

Current installments of long$-$term debt $1,2141,382$

Other accrued expenses $2,6112,170$

Total current liabilities $18,83118,298$

Long$-$term debt, excluding current installments $26,80724,267$

Deferred income taxes $565506$

Other long$-$term liabilities $1,8672,174$

Total liabilities $48,07045,245$

Common stock, par value $$0\mathrm{.}058989$

Paid$-$in capital $11,19910,899$

Retained earnings $46,42339,935$

Accumulated other comprehensive loss $(888)(651)$

Treasury stock, at cost $(58,196)(48,196)$

Total stockholders$($deficit$)$ equity $(1,373)2,076$

Total liabilities and stockholders$$ equity $$46,697$ $$47,321$

THE HOME DEPOT INC.

Consolidated Statements of Earnings

February $3,$ January $28,$

For Fiscal Year Ended $($$ millions$)20192018$

Net Sales $$124,433$ $$116,040$

Cost of sales $81,69976,530$

Gross profit $42,73439,510$

Operating expenses

Selling, general and administrative $22,44020,544$

Depreciation and amortization $2,1512,083$

Impairment loss $2470$

Total operating expenses $24,83822,627$

Operating income $17,89616,883$

Interest and other $($income$)$ expense:

Interest and investment income $(93)(74)$

Interest expense $1,2091,216$

Other $160$

Interest and other, net $1,1321,142$

Earnings before provision for income taxes $16,76415,741$

Provision for income taxes $3,9505,828$

Net earnings $$12,814$ $$9,913$

Federal and state statutory tax rate $22\%$

a$.$ Compute net operating assets $($NOA$)$ and net nonoperating obligations $($NNO$)$ for the fiscal year ended February $3,2019.$

NOA NNO

Answer $1$

$0$

Answer $2$

$0$

b$.$ For the fiscal year ended February $3,2019,$ show that: NOA $=$ NNO $+$ Stockholders$$ equity.

Stockholders'

NNO equity $($deficit$)$ NOA

Answer $3$

$0$

Answer $4$

$0$

$0$

c$.$ Compute net operating profit after tax $($NOPAT$)$ for the year ended February $3,2019.$ Assume a federal and state combined statutory tax rate of $22\%.$ Also, consider the Impairment loss to be a nonpersistent item. Exclude the after$-$tax amount from your NOPAT calculation.

NOPAT

Answer $5$

$0$