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3 years ago

Compute and Compare ROE, ROA, and RNOA

Business

1 answer:

FinnZ [79.3K]3 years ago

6 0

Answer:

ROE - 20.8%

ROA - 9.88%

RNOA - 20.33%

Explanation:

ROE = Net income / Average shareholder equity

Average shareholder equity = 48,633 + 46,878 / 2 = 47,770.50

ROE = 9,938 / 47,770.50

ROE = 20.8%

ROA = Net Income / Average Total Assets

Average total assets = 110,903 + 90,266 / 2 = 100,584.50

ROA = 9,938 / 100,584.50

ROA = 9.88%

RNOA = NOPAT / Average net Operating Assets

Average net Operating Assets = 56,535 + 51,447 / 2 = 53,991

NOPAT = Net Operating income before tax - Tax expense

NOPAT = 13,871 - 2,896 = 10,975

RNOA = 10,975 / 53,991

RNOA = 20.33%

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