Required a. Identify the components in its statement that you would consider operating. b. Identify those components that you would consider nonrecurring. ($ millions) For Year Ended Net sales Cost of sales Research and development expenses Selling, general, and administrative expenses Amortization of intangibles Goodwill and other intangible asset impairment losses Restructuring charges (credits) Asbestos-related charge Equity in earnings of nonconsolidated affiliates Sundry income (expense)-net Interest income Interest expense and amortization of debt discount Income before income taxes Provision for income taxes Net income December 31 a. b. 2014 2013 Operating? Nonrecurring? $54,974 $45,975 Yes 45,780 39,148 Yes 1,660 1,492 Yes 2,609 2,487 Yes 509 399 Yes 7 Yes 689 Yes Yes 630 Yes 891 No 39 No 1,571 No 1,569 26 54 1,112 125 37 1,473 4,102 481 $3,621 NOPAT (Round your answer to the nearest million dollar.) $ NOPM (Round your answer to one decimal place.) (97) Yes 2014 $1,776 0 x $ 0% * ◆ No ◆ No No ◆ No ◆ No ◆ ◆ ◆ Yes ◆ No ◆ No ◆ No ◆ No 2013 Yes Yes ◆ No • 0x 0% * ♦ ◆ ♦ ♦ ♦ ◆ c. Compute net operating profit after taxes (NOPAT) and net operating profit margin (NOPM) for each year. Assume a statutory tax rate of 35%. ( << << < <
Required a. Identify the components in its statement that you would consider operating. b. Identify those components that you would consider nonrecurring. ($ millions) For Year Ended Net sales Cost of sales Research and development expenses Selling, general, and administrative expenses Amortization of intangibles Goodwill and other intangible asset impairment losses Restructuring charges (credits) Asbestos-related charge Equity in earnings of nonconsolidated affiliates Sundry income (expense)-net Interest income Interest expense and amortization of debt discount Income before income taxes Provision for income taxes Net income December 31 a. b. 2014 2013 Operating? Nonrecurring? $54,974 $45,975 Yes 45,780 39,148 Yes 1,660 1,492 Yes 2,609 2,487 Yes 509 399 Yes 7 Yes 689 Yes Yes 630 Yes 891 No 39 No 1,571 No 1,569 26 54 1,112 125 37 1,473 4,102 481 $3,621 NOPAT (Round your answer to the nearest million dollar.) $ NOPM (Round your answer to one decimal place.) (97) Yes 2014 $1,776 0 x $ 0% * ◆ No ◆ No No ◆ No ◆ No ◆ ◆ ◆ Yes ◆ No ◆ No ◆ No ◆ No 2013 Yes Yes ◆ No • 0x 0% * ♦ ◆ ♦ ♦ ♦ ◆ c. Compute net operating profit after taxes (NOPAT) and net operating profit margin (NOPM) for each year. Assume a statutory tax rate of 35%. ( << << < <
Chapter12: Current Liabilities
Section: Chapter Questions
Problem 1PB: Consider the following situations and determine (1) which type of liability should be recognized...
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Transcribed Image Text:Required
a. Identify the components in its statement that you would consider operating.
b. Identify those components that you would consider nonrecurring.
($ millions) For Year Ended
Net sales
Cost of sales
Research and development expenses
Selling, general, and administrative expenses
Amortization of intangibles
Goodwill and other intangible asset impairment losses
Restructuring charges (credits)
Asbestos-related charge
Equity in earnings of nonconsolidated affiliates
Sundry income (expense)-net
Interest income
Interest expense and amortization of debt discount
Income before income taxes
Provision for income taxes
Net income
December 31
a.
b.
2014 2013 Operating? Nonrecurring?
$54,974 $45,975 Yes
45,780 39,148 Yes
1,660
1,492 Yes
2,609
2,487 Yes
399 Yes
509
7 Yes
689 Yes
Yes
630 Yes
891 No
39 No
1,571 No
1,569
26
54
1,112
125
37
1,473
4,102
481
$3,621
NOPAT (Round your answer to the nearest million dollar.) $
NOPM (Round your answer to one decimal place.)
(97) Yes
2014
$1,776
0 x $
0% *
◆ No
◆ No
◆
No
◆
No
◆
No
◆
Yes
◆ Yes
◆ Yes
◆
No
◆ No
◆
No
◆
No
2013
◆ No
¶
0 x
0% *
(
(
(
O
(
(
c. Compute net operating profit after taxes (NOPAT) and net operating profit margin (NOPM) for each year.
Assume a statutory tax rate of 35%.
♦
(
(
(
>
Transcribed Image Text:Identifying Operating and Nonrecurring Income Components
Following is the The Dow Chemical Company income statement.
($ millions) For Year Ended December 31
Net sales
Cost of sales
Research and development expenses
Selling, general, and administrative expenses
Amortization of intangibles
Goodwill and other intangible asset impairment losses
Restructuring charges (credits)
Asbestos-related charge
Equity in earnings of nonconsolidated affiliates
Sundry income (expense)-net
Interest income
Interest expense and amortization of debt discount
Income before income taxes
Provision for income taxes
Net income
2014 2013
$54,974 $45,975
45,780 39,148
1,660
1,492
2,609
2,487
509
399
7
689
26
54
1,112
125
37
1,473
4,102
481
$3,621
630
891
39
1,571
1,569
(97)
$1,776
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