Module $3$ Ongoing Analysis Project $($Illinois Tool Works$)$ An important part of learning is application. To learn accounting, we must practice the skills taught and apply those skills to real$-$world problems. To that end, we have designed a project to reinforce the lessons in each module and apply them to real world companies. By working through the questions in each module, you will complete a comprehensive analysis of two publicly traded companies that operating in roughly the same industry: Illinois Tool Works and Parker Hannifin. The analysis in this project is similar to the analysis performed by financial analysts, lenders, and investors. You might not aspire to those roles, but by completing a project of this magnitude, we will have mastered financial reporting at a sufficient level to be able to step into any role in an organization. NOTE: You might notice some small differences between the financials in the Excel spreadsheets and those in the annual reports. The Excel version has been prepared for learning purposes and differ from the annual reports in a few places. One difference is the Excel balance sheet includes four years as compared to the two years presented in the annual report. We added more years so that you can calculate ratios for three years $($more about that later$).$ Other differences relate to presentation and style. For example, neither company includes a line for "Gross profit" in their income statement and Parker Hannifin also omitted a line for "Operating income." The Excel spreadsheet shows those two items $($and others$)$ to make the financial statements consistent with the textbook examples and with the other company. For your submitted work, you should ALWAYS use the Excel version of the financial statements so that your answers are consistent with the solutions provided. Analyze Illinois Tool Works return on equity $($ROE$)$ and disaggregate the ratio to gain deeper insight into the company's returns over the three$-$year period. Note: Round all answers to the nearest whole dollar. Note: Assume a $22\%$ tax rate for all nonoperating items. Compute ROE DuPont disaggregation Disaggregate ROA ROE operating & nonoperating components Disaggregate RNOA e$.$ Disaggregate RNOA into profitability and productivity components: NOPM and NOAT for all three years reported on the income statement. Show that RNOA$=$ NOPM $$ NOAT. $ millionsAverage equity of the company shareholdersAverage net nonoperating obligations $($NNO$)$Average net operating assets $($NOA$)$Average total assetsAverage total equityNet incomeNet income attributable to company shareholdersNet nonoperating expense $($NNE$)$Net operating asset turnover $($NOAT$)$Net operating profit after tax $($NOPAT$)$Net operating profit margin $($NOPM$)$RevenueAverage equity of the company shareholdersAverage net nonoperating obligations $($NNO$)$Average net operating assets $($NOA$)$Average total assetsAverage total equityNet incomeNet income attributable to company shareholdersNet nonoperating expense $($NNE$)$Net operating asset turnover $($NOAT$)$Net operating profit after tax $($NOPAT$)$Net operating profit margin $($NOPM$)$RevenueNet operating profit margin $($NOPM$)$Dec$.31,2022$ Dec. $31,2021$ Dec. $31,2020$ $ millionsAverage equity of the company shareholdersAverage net nonoperating obligations $($NNO$)$Average net operating assets $($NOA$)$Average total assetsAverage total equityNet incomeNet income attributable to company shareholdersNet nonoperating expense $($NNE$)$Net operating asset turnover $($NOAT$)$Net operating profit after tax $($NOPAT$)$Net operating profit margin $($NOPM$)$RevenueAverage equity of the company shareholdersAverage net nonoperating obligations $($NNO$)$Average net operating assets $($NOA$)$Average total assetsAverage total equityNet incomeNet income attributable to company shareholdersNet nonoperating expense $($NNE$)$Net operating asset turnover $($NOAT$)$Net operating profit after tax $($NOPAT$)$Net operating profit margin $($NOPM$)$RevenueNet operating asset turnover $($NOAT$)$Dec$.31,2022$ Dec. $31,2021$ Dec. $31,2020$ NOPM $$ NOAT $=$ RNOANet operating profit margin $($NOPM$)$Net operating asset turnover $($NOAT$)$RNOADec$.31,2022$Dec. $31,2021$Dec. $31,2020$