Question

Compute, Disaggregate, and Interpret ROE and RNOA
Headquartered in Calgary, Alberta, Husky Energy Inc. is a publicly traded, integrated energy company. Selected fiscal year balance sheet and income statement information for Husky Energy follow (Canadian $ millions).

C$ millions	2018	2017
Revenues, net	$40,054
Net income attributable to Husky	2,623
Pretax NNE	425
Operating assets	58,016	$54,400
Operating liabilities	17,755	17,136
Equity attributable to Husky shareholders	35,284	32,321
Tax rate	20.00%

a. Compute the 2018 return on equity (ROE) and the 2018 return on net operating assets (RNOA).
Note: Round percentages to two decimal places (for example, enter 6.66% for 6.6555%).

2018 Return on equity: Answer%
2018 Return on net operating assets: Answer%

b. Disaggregate RNOA into net operating profit margin (NOPM) and net operating asset turnover (NOAT).
Note: For NOPM and RNOA, round percentages to two decimal places (for example, enter 6.66% for 6.6555%).
Note: For NOAT, round amount to three decimal places (for example, enter 6.776 for 6.77555).

NOPM	x	NOAT	=	RNOA
Answer	x	Answer	=	Answer

c. Compute the percentage of RNOA to ROE, and compute Husky’s nonoperating return for 2018.
Note: Round percentages to two decimal places (for example, enter 6.66% for 6.6555%).
Percentage of RNOA to ROE: Answer%
Nonoperating return: Answer%

Answer 1

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