Question: When calculating return on net operating assets analysts sometimes make adjustments to the net operating asset base used in the denominator or the ratio. Three

When calculating return on net operating assets analysts sometimes make adjustments to the net operating asset base used in the denominator or the ratio. Three possible adjustments are listed below. Explain what these adjustments are, and discuss the merits of these adjustments.

Non-operating asset adjustment.

Intangible asset adjustment.

Accumulated depreciation adjustment

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

Certainly Lets discuss each of the adjustments to the net operating asset base and their merits Nonoperating Asset Adjustment Explanation The nonoperating asset adjustment involves excluding nonoperat... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

Consider the following information: Rate of Return if State Occurs State of Economy Boom :57 Bust of Economy .66 .34 Probability of State Stock A .09 .13 Stock B Stock C .03 .19 .24 -.04 a. What is...

Suppose the value of a hypothetical firm is 100 today, and it can increase to 140 or decrease to 80, over one year. The probabilities are 60% and 40%, respectively. The firm has two debt contracts...

Read the case study "Southwest Airlines," found in Part 2 of your textbook. Review the "Guide to Case Analysis" found on pp. CA1 - CA11 of your textbook. (This guide follows the last case in the...

What is the value of a 13% coupon bond that is otherwise identical to the bond described in Part D? Would we now have a discount or a premium bond?

Blackburn & Smith common stock currently sells for $ 23 per share. The companys executives anticipate a constant growth rate of 10.5 percent and an end- of- year dividend of $ 2.50. a. What is your...

1. When thinking about 'How the Private Market is supposed to Work,' what does the concept of 'ALLOCATIVE efficiency' mean? 2. What does the concept of 'market power' mean? 3. Why is pollution a...

Described three characteristics of functionalism according to James R. Angell.

A partnership has assets of $210,000 and liabilities of $95,000. The capital information for the current partners is as follows: Given the above information, respond to each of the following...

A) The risk-free rate is 3%. The credit-spread of a bond (the difference between the yield-to-maturity and the risk-free rate) is 1%. The face value of the bond is $1,000, and the clean price is...

You are a counselor in a child and adolescent center.Your boss asks you to see a mother withher 3-year-old son.The mother brings her son to your office, and they are hostile toward each other.She...

Required information Exercise 2-23 (Algo) Analyzing a trial balance error LO P1 [The following information applies to the questions displayed below.] You are told the column totals in a trial balance...

Irvin Dempski owns and operates Adventure Travel Agency. The assets and liabilities of Adventure Travel Agency on December 31, 20Y5, and its revenue and expenses for the year are as follows: Accounts...

Pants (per day) 4 W Miyah's PPF N 1 Derek's PPF 2 3 4 5 6 Shirts (per day) The graph shows Miyah and Derek's Production Possibilities Curve. (a) What is Miyah's opportunity cost of producing a shirt?...

The parking brake fails on a 1800kg truck, causing it to roll downhill. At the bottom of the hill, it crashes into a parked car at 3 m/s. The truck comes to a stop in just 0.2 s. What force did the...

Henry, a resident of Nevada, sued Adam, a resident of Utah in the Federal Court in California. He sought $60,000 damages for personal injuries arising from an automobile accident that occurred in Los...

At the beginning of the year, the Hudson Corporation's liabilities were $700,000 and its stockholders' equity was $900,000. During the year, assets increased by $300,000 and stockholders' equity...

How do the principles of (a) Physical controls and (b) Documentation controls apply to cash disbursements?

=+c. Do there appear to be any outlying strength values?

=+b. Does the display appear to be reasonably symmetric about a representative value, or would you Unless otherwise noted, all content on this page is Cengage Learning. describe its shape in some...

=+d. What proportion of strength observations in this sample exceed 10 MPa?