Reference no: EM132618337
Rhodes Corporation's financial statements are shown below.
Rhodes Corporation: Income Statements for Year Ending December 31
(Millions of Dollars)
2020 2019
Sales $13,000 $11,000
Operating costs excluding depreciation 11,664 9,730
Depreciation and amortization 340 330
Earnings before interest and taxes $996 $940
Less interest 140 100
Pre-tax income $856 $840
Taxes (25%) 214 210
Net income available to common stockholders $642 $630
Common dividends $201 $200
Rhodes Corporation: Balance Sheets as of December 31 (Millions of Dollars)
2020 2019
Assets
Cash $650 $600
Short-term investments 130 100
Accounts receivable 2,750 2,500
Inventories 1,550 1,500
Total current assets $5,080 $4,700
Net plant and equipment 3,750 3,500
Total assets $8,830 $8,200
Liabilities and Equity
Accounts payable $1,300 $1,200
Accruals 650 600
Notes payable 184 100
Total current liabilities $2,134 $1,900
Long-term debt 1,300 1,200
Total liabilities $3,434 3,100
Common stock 3,655 3,800
Retained earnings 1,741 1,300
Total common equity $5,396 $5,100
Total liabilities and equity $8,830 $8,200
Suppose the federal-plus-state tax corporate tax is 25%. Answer the following questions.
Problem 1: 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.
Problem 2: 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
Problem 3: 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
Problem 4: 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.
Problem 5: What is the ROIC for 2020? Round your answer to two decimal places.
Problem 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 million should be entered as 1, not 1,000,000. Round your answers to the nearest whole number.