Question

Following is information from American Eagle Outfitters for 2016, the year ended January 28, 2017, ($ in thousands). Total revenue $3,609,865 Total revenue growth rate 4% Net operating profit margin (NOPM) 5.7% Net operating profit after tax (NOPAT) $207,262 Net operating asset turnover (NOAT) 4.37 Projected net operating assets (NOA) for 2017 is:

Answer 1

Projected sales for 2017

= 104% x $3,609,865

= $3,754,259,60

NOAT = Sales/NOA

4.37 = $3,754,259.60

NOA

4,37NOA = $3,754,259.60

NOA = $3,754,259.60/4.37

NOA = $859,098.3066

Thus, projected net operating asset for 2017 is $859,098.3066

Step-by-step explanation:

In this case, there is need to apply the formula for calculating net operating asset turnover, which is equal to sales divided by net operating assets. Sales and net operating asset turnover have been given with the exception of net operating assets. Thus, net operating asset is made the subject of the formula.