Begin with the partial model in the file Ch06 P15 Build a Model.xlsx on the textbook’s Web site.

a. Using the financial statements shown here for Lan & Chen Technologies, calculate net operating working capital, total net operating capital, net operating profit after taxes, free cash flow, and return on invested capital for 2018. (Hint: Start with the partial model in the file and report all dollar figures in thousands to reduce clutter.)

b. Assume there were 15 million shares outstanding at the end of 2018, the year-end closing stock price was $65 per share, and the after-tax cost of capital was 8%. Calculate EVA and MVA for 2018.

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Lan & Chen Technologies: Income Statements for Year Ending December 31 (Thousands of Dollars) 2018 2017 Sales Expenses excluding depreciation and amortization EBITDA Depreciation and amortization $945,000 $900,000 812,700 774,000 $132,300 33,100 $126,000 31,500 EBIT $ 99,200 $ 94,500 Interest expense Pre-tax earnings Taxes (40%) Net income 10,470 8,600 $ 88,730 35,492 $ 85,900 34,360 $ 53,238 $ 51,540 Common dividends $ 43,300 $ 41,230 Addition to retained earnings $ 9,938 $ 10,310