Question

$ millions	May 31, 2015	May 31, 2014
Operating assets	$62,090	$57,002
Nonoperating assets	54,368	38,819
Total assets	116,458	95,821
Operating liabilities	20,180	19,055
Nonoperating liabilities	41,958	24,097
Total liabilities	62,138	43,152
Total Oracle stockholders' equity	54,320	52,669
Total revenues	38,559
Operating income before tax	13,993
Nonoperating expense before tax	1,037
Tax expense	3,498
Net income	9,458

I am having trouble calculating RNOA and the other solutions I have found on Chegg are wrong.

Answer 1

Return on net operating asset (RNOA) is the operating performance of assets. Investors require such ratio for their investments’ decision.

Net operating income after tax = Operating income before tax – Tax expense

                                                = 13,993 – 3,498

                                                = $10,495

Ending net operating asset = Operating assets – Operating liabilities

                                                = 62,090 – 20,180

                                                = 41,910

Beginning net operating assets = Operating assets – Operating liabilities

                                                  = 57,002 – 19,055

                                                = 37,947

Average net operating assets = (Beginning + Ending) / 2

                                                = (37,947 + 41,910) / 2

                                                = $39,928.50

RNOA = (Net operating income after tax / Average net operating assets) × 100

            = ($10,495 / $39,928.50) × 100

            = 26.28% (Answer)