164.0 Free Cash Flows Rhodes Corporation: Income Statements for Year Ending December 31 (Millions of Dollars) 2016 2015 Sales $9,350.0 $8,500.0 Operating costs excluding depreciation 7,013.0 7,225.0 Depreciation and amortization 196.0 179.0 Earnings before interest and taxes $2,141.0 $1,096.0 Less Interest 201.0 183.0 Pre-tax income $1,940.0 $913.0 Taxes (40%) 776.0 365.2 Net income available to common stockholders $1,164.0 $547.8 Common dividends $1,048.0 $438.0 Rhodes Corporation: Balance Sheets as of December 31 (Millions of Dollars) 2016 2015 Assets Cash $113.0 $94.0 Short-term investments 47.0 43.0 Accounts receivable 1,326.0 1,020.0 Inventories 1,658.0 1,275.0 Total current assets $3,144.0 $2,432.0 Net plant and equipment 1,964.0 1,785.0 Total assets $5,108.0 $4,217.0 Liabilities and Equity Accounts payable $561.0 $510.0 Accruals 774.0 595.0 Notes payable 187.0 170.0 Total current liabilities $1,522.0 $1,275.0 Long-term debt 1,870.0 1,700.0 Total liabilities $3,392.0 $2,975.0 Common stock 1,435.0 1,077.0 Retained earnings 281.0 165.0 Total common equity $1,716.0 $1,242.0 Total liabilities and equity $5,108.0 $4,217.0 Using Rhodes Corporation's financial statements (shown above), answer the following questions. a. What is the net operating profit after taxes (NOPAT) 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. million b. What are the amounts of net operating working capital for both years? 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. 2016 $ million 2015 $ million c. What are the amounts of total net operating capital for both years? 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. 2016 $ million 2015 $ million d. 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. million e. What is the ROIC for 2016? Round your answer to two decimal places. f. 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 999 Payment of dividends million million Repurchase (Issue) stock Purchase (Sale) of short-term investments million Quantitative Problem: Rosnan Industries' 2013 and 2012 balance sheets and income statements are shown below. Balance Sheets: 2013 2012 Cash and equivalents $70 $55 Accounts receivable 275 300 Inventories 375 350 Total current assets $720 $705 Net plant and equipment 2,000 1,490 Total assets $2,720 $2,195 $150 $85 75 50 Accounts payable Accruals Notes payable Total current liabilities Long-term debt Common stock Retained earnings Total liabilities and equity 120 $345 450 1,225 700 $2,720 145 $280 290 1,225 400 $2,195 Income Statements: 2012 $1,500 1,000 $500 Sales Operating costs excluding depreciation EBITDA Depreciation and amortization EBIT Interest EBT Taxes (40%) Net income 2013 $2,000 1,250 $750 100 $650 62 $588 235 $353 $425 45 $380 152 $228 Dividends paid Addition to retained earnings $53 $300 $48 $180 Shares outstanding Price WACC 100 $25.00 10.00% 100 $22.50 The balance in the firm's cash and equivalents account is needed for operations and is not considered "excess" cash. What is Rosnan's 2013 net operating working capital (NOWC)? What is Rosnan's 2013 net working capital (NWC)
