The fiscal 2016 financial statements of Nike Inc. shows net operating profit margin (NOPM) of 11.4%, net operating asset turnover (NOAT) of 3.83, return on equity of 30.1%, and adjusted return on assets of 17.1%.
What is the company's nonoperating return?
A) (13.6)%
B) 18.7%
C) (14.5)%
D) 35.4%
E) There is not enough information to calculate the ratio.

Question

Quizplus · Accepted Answer

The nonoperating return is calculated as the difference between the return on equity and the NOPM multiplied by the NOAT. In this case, the nonoperating return is 30.1% - 11.4% * 3.83 = 18.7%.

The Fiscal 2016 Financial Statements of Nike Inc