1. Exhibit 10.13 presents historical data for ShipCo, a manufacturer of ships. nowhas ShipCo performed o inv ested capital)? What is Based on the data, how has ShipCo performed over the past five years? What is its ROIC for years 2 to 5 (using average invested capital)? What is its operating margin? What is its capital turnover? Is it creating more or less value over time? Assume an operating tax rate of 30 percent and cost of capital of 9 percent. EXHIBIT 10.13 ShipCo: Income Statement and Balance Sheet $ million Year Year Year Year Year 5 Balance sheet 530.0 556.5 601.0 661 674.3 Operating cash Excess cash and Year Year Year Year Year 5 10.6 11 12.0 13.2 13.5 Income statement 2 2 Revenues marketable Cost of sales Selling, general, and 344.5) (364.5) (396.7) 439.6) 451.8)securities 102.8 108.9 111.2 118.2 139.8 administrative 79.5) (86.87 (92.6) (107.9 Accounts receivable 79.5 80.7 93.2 99.2 97.8 Depreciation EBIT Interest expense Gain (loss) on sale 15.9 (16.7) (18.09. (20.2) Inventory 90.1 89.0 99.2 09. 94.4Current assets 7.5) (7.5) 7 7.5 (7.5 69.6 183.6 204.3 231.4 242.8 362.5 384.3 420.7 462.0 493.8 Property, plant, and of assets (10.0 equipment 06.7 219.8 240.4 267.8 276.5 Earnings before Go to page 309 taxes Taxes Net income 82.6 71.5 91.7 101.6 86.9 Equity investments 180.0 180.0 7.8 50.1 64.2 71.1 60.8 Total assets 7.3 170 18.0 7.8 183 Accounts payable 116.6 119.6 126.2 135.5 134.9 (24.8) (21.5) 27.5) 30.5) (26.1) 49.2 784.2 841.1 909.8 950.3 Dividends Short-term debt Accrued expenses Current liabilities27 253.7 264.4 279.7 277.6 5.0 45.0 45.0 45.0 450 0.1 89.0 93.2 99.2 97.8 Long-term debt Common stock Retained earnings 292.5 3255 371.7 425.1467.6 05.0 105.0 105.0 105.0 105.0 00.0 100.0 100.0 100.0 100.0 Total liabilities and equity 49.2 784.2 841.1 909.8 950.3 2. Using the data presented in Question 1, decompose operating margin and capital turnover. What has been occurring at ShipCo over the five-year period? What might be driving these results? 1. Exhibit 10.13 presents historical data for ShipCo, a manufacturer of ships. nowhas ShipCo performed o inv ested capital)? What is Based on the data, how has ShipCo performed over the past five years? What is its ROIC for years 2 to 5 (using average invested capital)? What is its operating margin? What is its capital turnover? Is it creating more or less value over time? Assume an operating tax rate of 30 percent and cost of capital of 9 percent. EXHIBIT 10.13 ShipCo: Income Statement and Balance Sheet $ million Year Year Year Year Year 5 Balance sheet 530.0 556.5 601.0 661 674.3 Operating cash Excess cash and Year Year Year Year Year 5 10.6 11 12.0 13.2 13.5 Income statement 2 2 Revenues marketable Cost of sales Selling, general, and 344.5) (364.5) (396.7) 439.6) 451.8)securities 102.8 108.9 111.2 118.2 139.8 administrative 79.5) (86.87 (92.6) (107.9 Accounts receivable 79.5 80.7 93.2 99.2 97.8 Depreciation EBIT Interest expense Gain (loss) on sale 15.9 (16.7) (18.09. (20.2) Inventory 90.1 89.0 99.2 09. 94.4Current assets 7.5) (7.5) 7 7.5 (7.5 69.6 183.6 204.3 231.4 242.8 362.5 384.3 420.7 462.0 493.8 Property, plant, and of assets (10.0 equipment 06.7 219.8 240.4 267.8 276.5 Earnings before Go to page 309 taxes Taxes Net income 82.6 71.5 91.7 101.6 86.9 Equity investments 180.0 180.0 7.8 50.1 64.2 71.1 60.8 Total assets 7.3 170 18.0 7.8 183 Accounts payable 116.6 119.6 126.2 135.5 134.9 (24.8) (21.5) 27.5) 30.5) (26.1) 49.2 784.2 841.1 909.8 950.3 Dividends Short-term debt Accrued expenses Current liabilities27 253.7 264.4 279.7 277.6 5.0 45.0 45.0 45.0 450 0.1 89.0 93.2 99.2 97.8 Long-term debt Common stock Retained earnings 292.5 3255 371.7 425.1467.6 05.0 105.0 105.0 105.0 105.0 00.0 100.0 100.0 100.0 100.0 Total liabilities and equity 49.2 784.2 841.1 909.8 950.3 2. Using the data presented in Question 1, decompose operating margin and capital turnover. What has been occurring at ShipCo over the five-year period? What might be driving these results