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Rus_ich [418]
3 years ago
8

Following is the income statement for Nordstrom Company. Assume that the combined federal and state statutory tax rate is 37%. (

$ millions) 2016 Net sales $14,095 Credit card revenues 342 Total revenues 14,437 Cost of sales and related buying and occupancy costs (9,168) Selling, general and administrative expenses (4,168) Earnings before interest and income taxes 1,101 Interest expense, net (125) Earnings before income taxes 976 Income tax expense (376) Net earnings $ 600 Compute NOPAT for Nordstrom for 2016. (Hint: Treat credit card revenues as operating.)
Business
1 answer:
Anon25 [30]3 years ago
8 0

Answer:

$681,250,000

Explanation:

Net operating profit after tax = Earnings before interest and income taxes - ( Income tax expense+(Interest expense, net* tax rate)

Net operating profit after tax = $1,101 - ($376 + ($125*0.37)

Net operating profit after tax = $1,101 - ($376 + $46.25)

Net operating profit after tax = $1,101 - $422.25

Net operating profit after tax = $678.75 * $'million

Net operating profit after tax = $678,750,000

So,  NOPAT for Nordstrom in 2016 is $678,750,000

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