Question

Following is the balance sheet for Lowe’s Companies Inc.

LOWE’S COMPANIES INC.
Consolidated Balance Sheet
$ millions, except par value Feb. 1, 2019
Current assets
Cash and cash equivalents	$1,124
Short-term investments	480
Merchandise inventory—net	27,634
Other current assets	2,064
Total current assets	31,302
Property, less accumulated depreciation	40,550
Long-term investments	563
Deferred income taxes—net	647
Goodwill	667
Other assets	2,189
Total assets	$75,918
Current liabilities
Short-term borrowings	$1,588
Current maturities of long-term debt	2,442
Accounts payable	18,214
Accrued compensation and employee benefits	1,456
Deferred revenue	2,858
Other current liabilities	5,335
Total current liabilities	31,893
Long-term debt, excluding current maturities	31,660
Deferred revenue—extended protection plans	1,819
Other liabilities	2,528
Total liabilities	67,900
Shareholders’ equity
Preferred stock—$5 par value, none issued	-
Common stock—$0.50 par value	882
Capital in excess of par value	-
Retained earnings	7,594
Accumulated other comprehensive loss	460
Total shareholders’ equity	8,936
Total liabilities and shareholders’ equity	$76,836

Identify and compute net operating assets (NOA) as of February 1, 2019. Assume that long‑term investments are nonoperating.

Answer 1

Operating assets = Cash and cash equivalents - Merchandise inventory net - Other current assets - Property, less accumulated depreciation - Deferred income taxes net - Goodwill - Other assets

Operating assets = 1124 + 27634 + 2064 + 40550 + 647+ 667 + 2189

Operating assets = 74875

Operating liabilities = Accounts payable + Accrued compensation and employee benefits - Deferred revenue - Other current liabilities -Deferred revenue extended protection plans - Other liabilities

Operating liabilities = 18214 + 1456 + 2858 + 5335 + 1819 + 2528

Operating liabilities = 32210

Net operating assets = Operating assets - Operating liabilities

Net operating assets = 74875 - 32210

Net operating assets = 42665