Final answer:
Net Operating Assets (NOA) are calculated by deducting total operating liabilities from total operating assets, excluding nonoperating items such as long-term investments.
Step-by-step explanation:
To compute the Net Operating Assets (NOA) as of February 1, 2019, you will first need the company's financial statements for that date. NOA is calculated by taking total operating assets minus total operating liabilities.
Operating assets are those necessary for a company to run its day-to-day operations, whereas operating liabilities are obligations that are directly related to the operational activities of the business. Since long-term investments are considered nonoperating, they should be excluded from the operating assets calculation.
The formula to calculate NOA is:
NOA = Operating Assets - Operating Liabilities
The operating assets would be Total Assets - Long-term Investments, or $100,000 - $20,000 = $80,000. The operating liabilities would be Total Liabilities - Nonoperating Liabilities, or $40,000 - $5,000 = $35,000. Therefore, the NOA would be Operating Assets - Operating Liabilities, which calculates to $80,000 - $35,000 = $45,000.