Case study-rhodes corporation

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Reference no: EM133120476

Rhodes Corporation: Income Statements for Year Ending December 31 (Millions of Dollars)

 

2016

2015

Sales

$6,900.0

$6,000.0

Operating costs excluding depreciation

5,693.0

5,100.0

Depreciation and amortization

210.0

168.0

    Earnings before interest and taxes

$997.0

$732.0

Less Interest

148.0

129.0

    Pre-tax income

$849.0

$603.0

Taxes (40%)

339.6    

241.2

Net income available to common stockholders

$509.4

$361.8

Common dividends

$458.0

$289.0

Rhodes Corporation: Balance Sheets as of December 31 (Millions of Dollars)

 

2016

2015

Assets

Cash

$79.0

$72.0

Short-term investments

35.0

30.0

Accounts receivable

1,080.0

900.0

Inventories

1,170.0

900.0

    Total current assets

$2,364.0

$1,902.0

Net plant and equipment

2,100.0

1,680.0

Total assets

$4,464.0

$3,582.0

Liabilities and Equity

Accounts payable

$600.0

$480.0

Accruals

330.0

300.0

Notes payable

138.0

120.0

    Total current liabilities

$1,068.0  

$900.0

Long-term debt

1,380.0

1,200.0

    Total liabilities

$2,448.0

$2,100.0

Common stock

1,855.6

1,373.0

Retained earnings

160.4

109.0

    Total common equity

$2,016.0

$1,482.0

Total liabilities and equity

$4,464.0

$3,582.0


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 answer in millions. For example, an answer of $1.2 million should be entered as 1.2, not 1,200,000. 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

 

Reference no: EM133120476

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