Selected income statement information for 2018 is presented below for Home Depot Inc. and Lowes Companies Inc. Assume the statutory tax rate is 22%.

				Pretax Net		Average Net
				Nonoperating	Tax	Operating
Company ($ millions)	Ticker	Sales	NOPBT	Expense	Expense	Assets
Home Depot	HD	$65,787	$9,442	$592	$2,088	$15,332
Lowes	LOW	43,356	2,443	379	657	12,358

a. Compute the following measures for both companies.

1. NOPAT

	Company	NOPAT
	Home Depot
	Lowe's

2. RNOA

Note: 1. Select the appropriate numerator and denominator used to compute RNOA from the drop-down menu options. 2. Enter the numerator and denominator amounts to compute RNOA.

	Company	Numerator	Denominator	RNOA
		Average assetsAverage equityAverage NOANet incomeNOPATNOPBTRevenueTax expenseTax on operating profitTax shield	Average assetsAverage equityAverage NOANet incomeNOPATNOPBTRevenueTax expenseTax on operating profitTax shield
	Home Depot
	Lowe's

3. NOPM

Note: 1. Select the appropriate numerator and denominator used to compute NOPM from the drop-down menu options. 2. Enter the numerator and denominator amounts to compute NOPM.

	Company	Numerator	Denominator	NOPM
		Average assetsAverage equityAverage NOANet incomeNOPATNOPBTRevenueTax expenseTax on operating profitTax shield	Average assetsAverage equityAverage NOANet incomeNOPATNOPBTRevenueTax expenseTax on operating profitTax shield
	Home Depot
	Lowe's

4. NOAT

Note: 1. Select the appropriate numerator and denominator used to compute NOAT from the drop-down menu options. 2. Enter the numerator and denominator amounts to compute NOAT.

	Company	Numerator	Denominator	NOAT
		Average assetsAverage equityAverage NOANet incomeNOPATNOPBTRevenueTax expenseTax on operating profitTax shield	Average assetsAverage equityAverage NOANet incomeNOPATNOPBTRevenueTax expenseTax on operating profitTax shield
	Home Depot
	Lowe's

b. Indicate which of these two companies:

Indicate which of these two companies:	Company
1. Is more profitable (in $s).	Home DepotLowe's
2. Produces the higher profit margin (in %).	Home DepotLowe's
3. Uses its NOA more efficiently.	Home DepotLowe's
4. Produces the higher return on NOA.	Home DepotLowe's