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Compute the percentage of RNOA to ROE

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Question - Compute, Disaggregate, and Interpret ROE and RNOA

Headquartered in Calgary, Alberta, Husky Energy Inc. is a publicly traded, integrated energy company. Selected fiscal year balance sheet and income statement information for Husky Energy follow (Canadian $ millions).

$ millions 2018 2017

Revenues, net $26,702

Net income attributable to Husky 1,748

Pretax NNE 283

Operating assets 38,677 $36,266

Operating liabilities 11,837 11,424

Equity attributable to Husky shareholders 23,522 21,547

Tax rate 22.00%

Required -

a. Compute the 2018 return on equity (ROE) and the 2018 return on net operating assets (RNOA).

b. Disaggregate RNOA into net operating profit margin (NOPM) and net operating asset turnover (NOAT).

c. Compute the percentage of RNOA to ROE, and compute Husky's nonoperating return for 2018.

Reference no: EM132658825

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