Reference no: EM132483640
Free Cash Flows
Rhodes Corporation: Income Statements for Year Ending December 31 (Millions of Dollars)
2016 2015
Sales $1,875.0 $1,500.0
Operating costs excluding depreciation 1,500.0 1,275.0
Depreciation and amortization 52.0 44.0
Earnings before interest and taxes $323.0 $181.0
Less Interest 40.0 32.0
Pre-tax income $283.0 $149.0
Taxes (40%) 113.2 59.6
Net income available to common stockholders $169.8 $89.4
Common dividends $153.0 $72.0
Rhodes Corporation: Balance Sheets as of December 31 (Millions of Dollars)
2016 2015
AssetsCash $27.0 $21.0
Short-term investments 10.0 8.0
Accounts receivable 207.0 180.0
Inventories 270.0 225.0
Total current assets $514.0 $434.0
Net plant and equipment 522.0 435.0
Total assets $1,036.0 $869.0
Liabilities and EquityAccounts payable $137.0 $105.0
Accruals 59.0 45.0
Notes payable 38.0 30.0
Total current liabilities $234.0 $180.0
Long-term debt 375.0 300.0
Total liabilities $609.0 $480.0
Common stock 384.2 363.0
Retained earnings 42.8 26.0
Total common equity $427.0 $389.0
Total liabilities and equity $1,036.0 $869.0
Using Rhodes Corporation's financial statements (shown above), answer the following questions.
Question 1: What is the free cash flow for 2016? 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 answer to one decimal place.
Question 2: What is the ROIC for 2016? Round your answer to two decimal places.
Question 3: 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 $1.2 million should be entered as 1.2, not 1,200,000. Round your answers to one decimal place.
- After-tax interest payment$ millionReduction (increase) in debt$ millionPayment of dividends$ millionRepurchase (Issue) stock$ millionPurchase (Sale) of short-term investments