Nucor Corporation produces steel and steel products at its eight mills and is a major recycler of scrap metal. The following data relate to Nucor for four years. In 2017, Nucor's net income was higher by $175.2 million because of a one-time effect of the Tax Cuts and Jobs Act. Nucor Corporation ($ in millions) 2015 2016 2017 2018 $15,841.3 9,084.8 3,795.1 20,252.4 1,380.6 Total assets $14,327.0 7,849.9 4,388.5 $15,223.5 8,254.7 4,357.1 16,208.1 $17,920.6 10,202.0 4,291.1 25,067.3 2,481.1 Common stockholders' equity Total debt Sales Net income 900.4 Interest expense 169.2 173.6 135.5 Assumed marginal income tax rate 0.37 0.37 0.23 Source: Nucor Form 10-Ks for 2015-2018. Required: In the following analyses, eliminate the one-time net income effect of the Tax Cuts and Jobs Act on 2017's results. 1. Calculate Nucor's ROA for 2016, 2017, and 2018. 2. Decompose ROA into operating profit margin and asset turnover components. 3. Has Nucor's profitability changed over the three years? 4. Calculate the rate of return on common stockholders' equity for 2016, 2017, and 2018.

Nucor Corporation produces steel and steel products at its eight mills and is a major recycler of scrap metal. The following data relate to Nucor for four years. In 2017, Nucor's net income was higher by $175.2 million because of a one-time effect of the Tax Cuts and Jobs Act. Nucor Corporation ($ in millions) 2015 2016 2017 2018 $15,841.3 9,084.8 3,795.1 20,252.4 1,380.6 Total assets $14,327.0 7,849.9 4,388.5 $15,223.5 8,254.7 4,357.1 16,208.1 $17,920.6 10,202.0 4,291.1 25,067.3 2,481.1 Common stockholders' equity Total debt Sales Net income 900.4 Interest expense 169.2 173.6 135.5 Assumed marginal income tax rate 0.37 0.37 0.23 Source: Nucor Form 10-Ks for 2015-2018. Required: In the following analyses, eliminate the one-time net income effect of the Tax Cuts and Jobs Act on 2017's results. 1. Calculate Nucor's ROA for 2016, 2017, and 2018. 2. Decompose ROA into operating profit margin and asset turnover components. 3. Has Nucor's profitability changed over the three years? 4. Calculate the rate of return on common stockholders' equity for 2016, 2017, and 2018.

Name: Nucor Corporation produces steel and steel products at its eight mill
Uploaded: 2022-11-23T13:49:46.000Z
Channel: Bartleby
Description: Nucor Corporation produces steel and steel products at its eight mills and is a major recycler of scrap metal. Thefollowing data relate to Nucor for four years. In 2017, Nucor's net income was higher by $175.2 million because of aone-time effect of

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter12: Balanced Scorecard And Other Performance Measures

Section: Chapter Questions

Problem 3PA: Macon Mills is a division of Bolin Products. Inc. During the most recent year, Macon had a net...

See similar textbooks

Similar questions

Redline Publishers, Inc. produces various manuals ranging from computer software instructional booklets to manuals explaining the installation and use of large pieces of industrial equipment. At the end of 2016, the company’s balance sheet reported total assets of $62 million and total liabilities of $40 million. The income statement for 2016 reported net income of $1.1 million, which represents an approximate 3% increase from the prior year. The company’s effective income tax rate is 30%. Near the end of 2016, a variety of expenditures were made to overhaul the company’s manufacturing equipment. None of these expenditures exceeded $750, the materiality threshold the company has set for the capitalization of any such expenditure. Even though the overhauls extended the service life of the equipment, the expenditures were expensed, not capitalized. John Henderson, the company’s controller, is worried about the treatment of the overhaul expenditures. Even though no individual expenditure…
Redline Publishers, Inc., produces various manuals ranging from computer software instructional booklets to manuals explaining the installation and use of large pieces of industrial equipment. At the end of 2011, the company's balances sheet reported total assets of $62 million and total liabilities of $40 million. The income statement for 2011 reported net income of $1.1 million, which represents an approximate 3% increase from the prior year. The company's effective income tax rate is 30%. Near the end of 2011, a variety of expenditures were made to overhaul the company's manufacturing equipment. None of these expenditures exceeded $750, the materiality threshold the company has set for the capitalization of any such expenditures. Even though the overhauls extended the service life of the equipment, the expenditures were expensed, not capitalized. John Henderson, the company's controller, is worried about the treatment of the overhaul expenditures. Even though no individual…
Redline Publishers, Inc. creates a wide range of publications, from computer software instruction manuals to guides detailing how to set up and run massive industrial machines. The company's financial statement showed total assets of $62 million and total liabilities of $40 million as of the end of the previous year.. There was an increase of around 3 percent from the previous year in the income statement's net income of $1.1 million for 2016. The company's effective tax rate is 30%. Several investments were made to upgrade the production equipment of the firm at the end of 2016. The company's materiality level for such expenses is $750, hence none of these expenses were capitalized. Despite the fact that the overhauls prolonged the equipment's useful life, the costs were deducted rather than capitalized. The controller of the corporation, John Henderson, is concerned about how the overhaul costs will be handled. Despite the fact that no one expense went beyond the'materiality'…
At the end of last month,Paarl Manufacturing had $45,945 in the bank. It owed the bank $224,500for their mortgage. It also had a working capital loan of $32,000. Its customers owed $22,937 and it owed its suppliers $12,999. The company owned property worth $252,000. It had$120,500 in finished goods,$103,500 in raw materials, and $38,000 in work in progress. Its production equipment was worth $456,000 when new (partially paid for by a large government loan due to be paid back in three years) but had accumulated a total of $232,000 in depreciation—$33,500 worth last month. The company has investors who put up $101,000 for their ownership. It has been reasonably profitable; this month the gross income from sales was $216,000, and the costs associated with sales was only $40,500. Expenses were also relatively low; salaries were $43,000 last month, while the other expenses were depreciation, maintenance at $1520, advertising at $3350, and insurance at $280. In spite of $32,916in…
DDD Corporation, a domestic manufacturing corporation, had gross sales of P100,000,000 for fiscal year ending June 30, 2021 and incurred cost of sales of P60,000,000 and cost of sales of P17,500,000 with the following details: Cost of sales Direct materials P30,000,000 Direct labor 20,000,000 Manufacturing overhead 10,000,000 Operating expenses Salaries and wages P7,000,000 Taxes 300,000 Depreciation 3,500,000 Professional fees 200,000 Advertising expense 3,000,000 Training expenses 3,000,000 Office Supplies 500,000 Required: 1.How much is the additional allowable training expenses, if any? 2.How much is the taxable net income of the company?
DDD Corporation, a domestic manufacturing corporation, had gross sales of P100,000,000 for fiscal year ending June 30, 2021 and incurred cost of sales of P60,000,000 and cost of sales of P17,500,000 with the following details: Cost of sales Direct materials P30,000,000 Direct labor 20,000,000 Manufacturing overhead 10,000,000 Operating expenses Salaries and wages P7,000,000 Taxes 300,000 Depreciation 3,500,000 Professional fees 200,000 Advertising expense 3,000,000 Training expenses 3,000,000 Office supplies 500,000 How much is the taxable net income of the company?
MetaverseTech LTD start-up sold 8672 Virtual Reality devices in 2022 at £155 per device. The production cost of each device was £102, on average. The company owner took a salary of £55,000, while the company employees were paid in total £283,000. The company paid £24,000 in warehouse rent, and £38,000 in office expenses. The company has a £100,000 note at the bank, with 8% interest rate. The company had income tax rate of 28%.Prepare a consolidated income statement of MetaverseTech LTD.
Doorchime Company makes doorbells. It has a weighted-average cost of capital of 6% and total assets of $5,690,000. Doorchime has current liabilities of $550,000. Its operating income for the year was $630,000. Doorchime does not have to pay any income taxes. One of the expenses for accounting purposes was a $70,000 advertising campaign run in early January. The entire amount was deducted this year, although the Doorchime CEO believes the beneficial effects of this advertising will last 4 years. Q. Calculate EVA for the year. Adjust both the year-end assets and operating income for advertising assuming that for the purposes of economic value added the advertising is capitalized and amortized on a straightline basis over 4 years.
Doorchime Company makes doorbells. It has a weighted-average cost of capital of 6% and total assets of $5,690,000. Doorchime has current liabilities of $550,000. Its operating income for the year was $630,000. Doorchime does not have to pay any income taxes. One of the expenses for accounting purposes was a $70,000 advertising campaign run in early January. The entire amount was deducted this year, although the Doorchime CEO believes the beneficial effects of this advertising will last 4 years. Q. Calculate residual income, assuming Doorchime defines investment as total assets.
Rowen, Inc. had pre-tax accounting income of $1,672,000 and a tax rate of 40% in 2015, its first year of operations. During 2015 the company had the following transactions: Received rent from Jane, Co. for 2016 $64,000 Municipal bond income $80,000 Depreciation for tax purposes in excess of book depreciation $40,000 Installment sales revenue to be collected in 2016 $108,000 6. At the end of 2015, which of the following deferred tax accounts and balances is reported on Rowen, Inc.’s balance sheet? Account Balance a. Deferred tax asset $32,000 b. Deferred tax liability $32,000 c. Deferred tax asset $59,200 d. Deferred tax liability $59,200
The Centennial Chemical Corporation announced that, for the period ending March 31, 2017, it had earned income after taxes of $2,768,028.25 on revenues of $13,144,680. The company’s costs (excluding depreciation and amortization) amounted to 61 percent of sales and it had interest expenses of $392,168. What is the firm’s depreciation and amortization expense if its average tax rate is 34 percent?
Tally Corp. sells tax software to aid individuals in completing their state and federal tax returns. During the current year, 11,000 software packages were sold resulting in $440,000 of sales revenue, $135,000 of variable costs, and $52,000 of fixed costs. If sales increase by $100,000: Total variable costs will Increase/decrease/stay the same by $ Total fixed costs will Increase/decrease/stay the same by $ Operating income will Increase/decrease/stay the same by $