MGMT 601 Study Guide - Final Guide: Dividend Discount Model, Retained Earnings, Economic Model
Document Summary
Total segments must be > 75% of consolidated revenue. Revenue >= 10% of all segment revenue. Assets >= 10% of all segment assets. Each line in b/s expressed as a % of total assets (insights into composition of assets & financial structure) Each line in i/s expressed as a % of total sales revenue (insights into cost structure) Roa = [net income + interest expense*(1-statutory tax rate) + non-controlling interest ]/ avg assets. Rnoa = nopat / avg net operating assets. Rnoa = net operating profit margin x net operating asset turnover. Nopat = nopbt tax expense + (nne x tax rate) To compute tax on operating profit only: = pretax nne (or total nonoperating expenses+interest income if relevant) * tax. Pretax net nonoperating expenses = nonoperating expense nonoperating revenue. Nne = (non-operating expense non-operating revenue) (1 - statutory tax rate) Nne (estimation only) = nopat ni.
