Question

Income statements and balance sheets follow for The New YorkTimes Company. Refer to these financial statements to answer therequirements.

The New York Times Company Consolidated Statements of Income
	Fiscal year ended
(in thousands)	Dec. 29, 2013	Dec. 30, 2012
Operating revenues
Circulation	$ 824,277	$ 795,037
Advertising	666,687	711,829
Other	86,266	88,475
Total revenues	1,577,230	1,595,341
Production Costs
Raw materials	92,886	106,381
Wages and benefits	332,085	331,321
Other	201,942	213,616
Total production costs	626,913	651,318
Selling, general and administrative expenses	706,354	711,112
Depreciation and amortization	78,477	78,980
Total operating costs	1,411,744	1,441,410
Pension settlement expense	3,228	47,657
Multiemployer pension plan withdrawal expense	6,171	0
Other expense	0	2,620
Operating profit	156,087	103,654
Gain on sale of investments	0	220,275
Impairment of investments	0	5,500
(Loss)/income from joint ventures	(3,215)	2,936
Premium on debt redemption	0	0
Interest expense, net	58,073	62,808
Income from continuing operations before income taxes	94,799	258,557
Income tax expense	37,892	94,617
Income from continuing operations	56,907	163,940
Discontinued operations:
(Loss) from discontinued operations, net of tax	(20,413)	(113,447)
Gain on sale, net of tax	28,362	85,520
Income/(loss) from discontinued operations, net of tax	7,949	(27,927)
Net income/(loss)	64,856	136,013

Net (income)/loss attributable to the noncontrollinginterest	249	(166)
Net income/(loss) attributable to New York Times Company commonstockholders	65,105	135,847

The New York Times Company Consolidated Balance Sheets
	As of
(in thousands)	Dec. 29, 2013	Dec. 30, 2012
Cash and cash equivalents	$ 482,745	$ 820,490
Short-term investments	364,880	134,820
Accounts receivable, net	202,303	197,589
Deferred income taxes	65,859	58,214
Prepaid assets	20,250	23,085
Other current assets	36,230	26,320
Assets held for sale	0	137,050
Total current assets	1,172,267	1,397,568
Long-term marketable securities	176,155	4,444
Investments in joint ventures	40,213	40,872
Property plant and equipment, net	713,356	773,469
Goodwill, net	125,871	122,691
Deferred income taxes	179,989	302,212
Miscellaneous assets	164,701	166,214
Total assets	$2,572,552	$2,807,470
Accounts payable	$ 90,982	$ 88,990
Accrued payroll and other related liabilities	91,629	86,772
Unexpired subscriptions	58,007	57,336
Accrued expenses	107,755	118,753
Accrued incomes taxes	138	38,932
Liabilities held for sale	0	32,373
Total current liabilities	348,511	423,156
Long-term debt and capital lease obligations	684,142	696,752
Pension benefits obligation	444,328	737,889
Postretirement benefits obligation	90,602	110,347
Other	158,435	173,690
Total other liabilities	1,377,507	1,718,678
Stockholders’ equity
Common stock of $0.10 par value:

Class A common stock	15,129	15,027
Class B convertible	82	82
Additional paid-in capital	33,045	25,610
Retained earnings	1,283,518	1,230,450
Common stock held in treasury, at cost	(86,253)	(96,278)
Accumulated other comprehensive income loss), net of tax	(402,611)	(512,566)
Total New York Times Company stockholders’ equity	842,910	662,325
Noncontrolling interest	3,624	3,311
Total stockholders’ equity	846,534	665,636
Total liabilities and stockholders’ equity	$2,572,552	$2,807,470

Required:

a. Compute net operating profit after tax (NOPAT)for 2013 and 2012. Assume that combined federal and state statutorytax rates are 37% for both years.

b. Compute net operating assets (NOA) for 2013 and2012.

c. Compute return on net operating assets (RNOA)for 2013 and 2012. Net operating assets are $412,630 thousand in2011.

d. Compute return on common shareholders equity(ROE) for 2013 and 2012. Stockholders’ equity attributable to NewYork Times Company in 2011 is $506,360 thousand.

e. What is nonoperating return component of ROE for2013 and 2012?

f. Comment on the difference between ROE and RNOA.What inference do you draw from this comparison?