Compute net operating profit after tax

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Reference no: EM133116732

Question - Given Cisco Systems Consolidated Statements of Income and Balance Sheets.

Cisco Systems Consolidated Statements of Income

Years Ended December ($ millions)

July 27, 2019

July 28, 2018

Revenue



Product

$39,005

$36,709

Service

12,899

12,621

Total revenue

51,904

49,330

Cost of sales



Product

14,863

14,427

Service

4,375

4,297

Total cost of sales

19,238

18,724

Gross margin

32,666

30,606

Operating expenses



Research and development

6,577

6,332

Sales and marketing

9,571

9,242

General and administrative

1,827

2,144

Amortization of purchased intangible assets

150

221

Restructuring and other charges

322

358

Total operating expenses

18,447

18,297

Operating income

14,219

12,309

Interest income

1,308

1,508

Interest expense

(859)

(943)

Other income (loss), net

(97)

165

Interest and other income (loss), net

352

730

Income before provision for income taxes

14,571

13,039

Provision for income taxes

2,950

12,929

Net income

$11,621

$110

 

Cisco Systems Inc. Consolidated Balance Sheets

In millions, except par value

July 27, 2019

July 28, 2018

Assets



Current assets



Cash and cash equivalents

$11,750

$8,934

Investments

21,663

37,614

Accounts receivable, net of allowance for doubtful accounts

5,491

5,554

Inventories

1,383

1,846

Financing receivables, net

5,095

4,949

Other current assets

2,373

2,940

Total current assets

47,755

61,837

Property and equipment, net

2,789

3,006

Financing receivables, net

4,958

4,882

Goodwill

33,529

31,706

Purchased intangible assets, net

2,201

2,552

Deferred tax assets

4,065

3,219

Other assets

2,496

1,582

Total assets

$97,793

$108,784

Liabilities and equity



Current liabilities



Short-term debt

$10,191

$5,238

Accounts payable

2,059

1,904

Income taxes payable

1,149

1,004

Accrued compensation

3,221

2,986

Deferred revenue

10,668

11,490

Other current liabilities

4,424

4,413

Total current liabilities

31,712

27,035

Long-term debt

14,475

20,331

Income taxes payable

8,927

8,585

Deferred revenue

7,799

8,195

Other long-term liabilities

1,309

1,434

Total liabilities

64,222

65,580

Equity:



Cisco shareholders' equity



Preferred stock, no par value: 5 shares authorized; none issued and outstanding

--

--

Common stock and additional paid-in capital, $0.001 par value: 20,000 shares authorized;



4,250 and 4,614 shares issued and outstanding at July 27, 2019, and July 28, 2018, respectively

40,266

42,820

(Accumulated deficit) Retained earnings

(5,903)

1,233

Accumulated other comprehensive income (loss)

(792)

(849)

Total Cisco shareholders' equity

33,571

43,204

Total equity

33,571

43,204

Total liabilities and equity

$97,793

$108,784

Required -

(a) Compute net operating assets (NOA) for 2019.

(b) Compute net operating profit after tax (NOPAT) for 2019, assuming a federal and state statutory tax rate of 22%. Assume that all items on the 2019 income statement will persist.

Reference no: EM133116732

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