Question: Selected balance sheet and income statement information from Abbott Laboratories for 2018 follows ($ millions). Net income $2,368 Net income attributable to Company shareholders 2,368
Selected balance sheet and income statement information from Abbott Laboratories for 2018 follows ($ millions).
| Net income | $2,368 |
| Net income attributable to Company shareholders | 2,368 |
| Net operating profit after tax (NOPAT) | 2,940 |
| Net nonoperating expense (NNE) | 572 |
| Average net operating assets (NOA) | 48,222 |
| Average net nonoperating obligations (NNO) | 17,312 |
| Average total equity | 30,910 |
| Average equity attributable to Company shareholders | 30,711 |
Compute the following measures a through h.
a. Return on equity = (Net income attributable to Company shareholders/Average equity attributable to Company shareholders)
Note: Round percentage to one decimal place (for example, enter 6.7% for 6.6555%).
Answer
%
b. RNOA = NOPAT/Average NOA
Note: Round percentage to one decimal place (for example, enter 6.7% for 6.6555%).
Answer%
c. Nonoperating return = ROE − RNOA
Note: Round percentage to one decimal place (for example, enter 6.7% for 6.6555%).
Answer%
d. NNEP = NNE/Average NNO
Note: Round percentage to one decimal place (for example, enter 6.7% for 6.6555%).
Answer%
e. Spread = RNOA − NNEP
Note: Round percentage to one decimal place (for example, enter 6.7% for 6.6555%).
Answer%
f. FLEV = Average NNO/Average total equity
Note: Round amount to two decimal places (for example, enter 6.78 for 6.77555).
Answer
g. NCI ratio = (Net income attributable to Company shareholders/Net income)/(Average equity attributable to Company shareholders/Average total equity)
Note: Round amount to two decimal places (for example, enter 6.78 for 6.77555).
Answer
h. ROE = (RNOA + (Spread × FLEV)) × NCI ratio
Note: Round percentage to one decimal place (for example, enter 6.7% for 6.6555%).
Answer%
Step by Step Solution
3.43 Rating (153 Votes )
There are 3 Steps involved in it
a Return of Equity Net Income attributable to company shareholders Average Shareholders equity attri... View full answer
Get step-by-step solutions from verified subject matter experts
