Net operating profit less adjusted taxes

Assignment Help Financial Accounting

Reference no: EM131286239

You were hired as an equity analyst for American Express. You have computed the following figures for two manufacturers that are similar in business. The first, ABC, has Net Operating Profit Less Adjusted Taxes (NOPLAT) of $325 million, invested capital without goodwill of $2,500 and goodwill of $950 million. The second business is MNO has NOPLAT of $750 million, invested capital without goodwill of $6,000 million and no goodwill.

The cost of capital for ABC and MNO is 10%.

Compute Return on Invested Capital without goodwill for ABC?

Reference no: EM131286239

Questions Cloud

The accounts is zero except for cash-accounts receivable : The Marchetti Soup Company entered into the following transactions during the month of June: (a) purchased inventory on account for $165,000. Assume that the opening balances in each of the accounts is zero except for cash, accounts receivable, and a..

What is the continuing value as of year five : An equity analyst colleague at Goldman Sachs suggested that a 6% growth rate is too low for revenue, profit and cash flow beyond year five. If Net Operating Profit Less Adjusted Taxes (NOPLAT) equals $26.6 million in year six, Return on New Invested ..

Any measures you could take to alleviate the concerns raised : Why would you, as an accountant, be careful of the financial statement ratios provided by companies in their financial statements? How much reliability can you have on the ratios when comparing companies operating in different countries? Are there an..

Net operating profit less adjusted taxes : You were hired as an equity analyst for American Express. You have computed the following figures for two manufacturers that are similar in business. The first, ABC, has Net Operating Profit Less Adjusted Taxes (NOPLAT) of $325 million, invested capi..

What is the value per share utilizing market value approach : You are now becoming an expert at valuing companies. You have been consulted to value an industrial firm. The enterprise value of the firm is $10.0 billion. The company has no straight debt. What is the company’s equity value utilizing the market val..

What are benefits of financial analysis : What are benefits of financial analysis? Name three ratios, their benefit, and Explain briefly why you feel they are more important than the others.

Operating profit-adjusted for capitalized operating leases : Apex Industries expects to earn $25 million in operating profit next year. The company pays an operating tax rate of 30 percent. If the value of leased asset is $125 and the cost of debt is 10 percent, what is the approximate after-tax operating prof..

The appropriate beta for firm to use in the wacc : A firm has a target debt-to-equity ratio of 3. Its cost of equity equals 12 percent, its cost of debt is 9 percent, and the tax rate is 34 percent. What is the WACC? An analyst gathers the following information for Firm A and Firm B. Use the informat..

User Account

All Pages