Final answer:
The nonoperating return refers to the return generated from investments or activities that are not directly related to the core operations of a business. It helps evaluate the diversification and profitability of investments and other activities that contribute to the company's overall income. The nonoperating return provides insight into the overall financial performance of a business beyond its core operations.
Step-by-step explanation:
In financial analysis, the nonoperating return refers to the return generated from investments or activities that are not directly related to the core operations of a business. To compute the nonoperating return for the year 2018, you would need to identify the income or gains generated from sources such as investments, interest income, or property sales that are not part of the regular business operations.
Relevance in financial analysis: The nonoperating return provides insight into the overall financial performance of a business beyond its core operations. It helps evaluate the diversification and profitability of investments and other activities that contribute to the company's overall income. By analyzing the nonoperating return, investors and analysts can assess the sustainability and stability of a company's financial position.
Example: If a company earned $1,000 from stock investments in 2018 and had no other nonoperating income or losses, the nonoperating return for that year would be $1,000.