Excel Online Structured Activity: Free Cash Flows

The data for Rhodes Corporation's has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the questions below.

Free Cash Flows
(All dollar values are provided in millions.)
2018				2017
Sales, ST Invest, Notes Pay, LT Debt factor increase	1.20			Sales	$3,000
Operating costs as % of sales	77.50%			Cash as % of sales	1.00%
Cash factor increase	1.25			Accts Rec as % of sales	13.00%
Accts. Rec factor increase	1.20			Inventory as % of sales	20.00%
Inventory factor increase	1.20			Net Plant & Equip as % of sales	20.00%
Net Plant & Equip factor increase	1.10			Accts Pay as % of sales	7.00%
Accts Pay factor increase	1.15			Accruals as % of Sales	8.00%
Accruals factor increase	1.20
				Operating cost as % of sales	85.00%
Depreciation as % of Net Plant & Equip	10.00%			Depreciation as % of Net Plant & Equip	10.00%
Interest rate	10.00%			Interest rate	10.00%
Tax rate	40.00%			Tax rate	40.00%
Payout rate	90.00%			Payout rate	80.00%
				Short-term investments as % of sales	0.50%
				Notes payable as % of sales	2.00%
				Long-term debt as % of sales	20.00%
				Retained earnings multiple factor	1.50
Income Statements:	2018		2017
Sales	$3,600.0		$3,000.0
Operating costs excluding depreciation	2,790.0		2,550.0
Depreciation and amortization	66.0		60.0
Earnings before interest and taxes	$744.0		$390.0
Less interest	77.4		64.5
Pre-tax income	$666.6		$325.5
Taxes	266.6		130.2
Net income available to common stockholders	$400.0		$195.3
Common dividends	$360.0		$156.2
Balance Sheets:	2018		2017
Assets
Cash	$37.5		$30.0
Short-term investments	18.0		15.0
Accounts receivable	468.0		390.0
Inventories	720.0		600.0
Total current assets	$1,243.5		$1,035.0
Net plant and equipment	660.0		600.0
Total assets	$1,903.5		$1,635.0
Liabilities and Equity
Accounts payable	$241.5		$210.0
Accruals	288.0		240.0
Notes payable	72.0		60.0
Total current liabilities	$601.5		$510.0
Long-term debt	720.0		600.0
Total liabilities	$1,321.5		$1,110.0
Common stock	483.4		466.4
Retained earnings	98.6		58.6
Total common equity	$582.0		$525.0
Total liabilities and equity	$1,903.5		$1,635.0

Open spreadsheet

1. What is the net operating profit after taxes (NOPAT) for 2018? Enter your answer in millions. For example, an answer of $1.2 million should be entered as 1.2, not 1,200,000. Do not round intermediate calculations. Round your answer to one decimal place.

   $ million

2. What are the amounts of net operating working capital for both years? Enter your answers in millions. For example, an answer of $1.2 million should be entered as 1.2, not 1,200,000. Do not round intermediate calculations. Round your answers to one decimal place.

   2018 $ million

   2017 $ million

3. What are the amounts of total net operating capital for both years? Enter your answers in millions. For example, an answer of $1.2 million should be entered as 1.2, not 1,200,000. Do not round intermediate calculations. Round your answers to one decimal place.

   2018 $ million

   2017 $ million

4. What is the free cash flow for 2018? Enter your answer in millions. For example, an answer of $1.2 million should be entered as 1.2, not 1,200,000. Do not round intermediate calculations. Round your answer to one decimal place.

   $ million

5. What is the ROIC for 2018? Round your answer to one decimal places.

   %

6. 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 $1.2 million should be entered as 1.2, not 1,200,000. Do not round intermediate calculations. Round your answers to one decimal place.

   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

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