Rhodes Corporations financial statements are shown below. Rhodes Corporation: Income Statements for Year Ending December 31 (Millions
Fantastic news! We've Found the answer you've been seeking!
Question:
Rhodes Corporation’s financial statements are shown below.
Rhodes Corporation: Income Statements for Year Ending December 31 (Millions of Dollars)
2020 | 2019 | ||||
Sales | $ | 12,000 | $ | 11,000 | |
Operating costs excluding depreciation | 10,600 | 9,722 | |||
Depreciation and amortization | 380 | 350 | |||
Earnings before interest and taxes | $ | 1,020 | $ | 928 | |
Less interest | 140 | 100 | |||
Pre-tax income | $ | 880 | $ | 828 | |
Taxes (25%) | 220 | 207 | |||
Net income available to common stockholders | $ | 660 | $ | 621 | |
Common dividends | $ | 202 | $ | 200 |
Rhodes Corporation: Balance Sheets as of December 31 (Millions of Dollars)
2020 | 2019 | ||||
Assets | |||||
Cash | $ | 550 | $ | 500 | |
Short-term investments | 110 | 100 | |||
Accounts receivable | 2,750 | 2,500 | |||
Inventories | 1,850 | 1,700 | |||
Total current assets | $ | 5,260 | $ | 4,800 | |
Net plant and equipment | 3,750 | 3,500 | |||
Total assets | $ | 9,010 | $ | 8,300 | |
Liabilities and Equity | |||||
Accounts payable | $ | 1,300 | $ | 1,200 | |
Accruals | 650 | 600 | |||
Notes payable | 190 | 100 | |||
Total current liabilities | $ | 2,140 | $ | 1,900 | |
Long-term debt | 1,300 | 1,200 | |||
Total liabilities | $ | 3,440 | 3,100 | ||
Common stock | 4,422 | 4,400 | |||
Retained earnings | 1,368 | 1,000 | |||
Total common equity | $ | 5,790 | $ | 5,400 | |
Total liabilities and equity | $ | 9,230 | $ | 8,500 |
Suppose the federal-plus-state tax corporate tax is 25%. Answer the following questions.
- What is the net operating profit after taxes (NOPAT) for 2020? Enter your answer in millions. For example, an answer of $1 million should be entered as 1, not 1,000,000. Round your answer to the nearest whole number.
$ million
- What are the amounts of net operating working capital for both years? Enter your answers in millions. For example, an answer of $1 million should be entered as 1, not 1,000,000. Round your answers to the nearest whole number.
2020: $ million
2019: $ million
- What are the amounts of total net operating capital for both years? Enter your answers in millions. For example, an answer of $1 million should be entered as 1, not 1,000,000. Round your answers to the nearest whole number.
2020: $ million
2019: $ million
- What is the free cash flow for 2020? Enter your answer in millions. For example, an answer of $1 million should be entered as 1, not 1,000,000. Cash outflow, if any, should be indicated by a minus sign. Round your answer to the nearest whole number.
$ million
- What is the ROIC for 2020? Round your answer to two decimal places.
%
- How much of the FCF did Rhodes use for each of the following purposes: after-tax interest, net debt repayments, dividends, net stock repurchases, and net purchases of short-term investments? (Hint: Remember that a net use can be negative.) Enter your answers in millions. For example, an answer of $1 million should be entered as 1, not 1,000,000. Round your answers to the nearest whole number.
After-tax interest payment $ million Reduction (increase) in debt $ million Payment of dividends $ million Repurchase (Issue) stock $ million Purchase (Sale) of short-term investments $ million
Related Book For
Corporate Finance A Focused Approach
ISBN: 978-1337909747
7th edition
Authors: Michael C. Ehrhardt, Eugene F. Brigham
Posted Date: