2-19 Begin with the partial model in the file Ch02 Build a Model.xlsx on the textbook's website. Build a Model: Free a. Using the financial statements shown below for Lan & Chen Technologies, calculate net Cash Flows, EVA, operating working capital, total net operating capital, net operating profit after taxes, and MVA free cash flow, and return on invested capital for 2016. (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 2016, the year-end closing stock price was S65 per share, and the after-tax cost of capital was 8%. Calculate EVA and MVA for 2016 Lan & Chen Technologies: Income Statements for Year Ended December 31 (Thousands of Dollars) 2016 2015 Sales Expenses excluding depreciation and amortization EBITDA Depreciation and amortization EBIT Interest expense Pre-tax earnings Taxes (40%) Net income Common dividends Addition to retained earnings $945,000 812,700 132,300 33,100 99,200 10,470 $ 88,730 35,492 $ 53,238 $ 43,300 $9.938 $900,000 774,000 126,000 31,500 94,500 8,600 $ 85,900 34,360 $ 51,540 $ 41,230 $ 10,310 Lan & Chen Technologies: December 31 Balance Sheets 2016 2015 Assets Cash and cash equivalents Short-term investments Accounts receivable Inventories Total current assets Net fixed assets Total assets $ 47,250 3,800 283,500 141,750 $476,300 330,750 $807,050 $ 45,000 3,600 270,000 135,000 $453,600 315,000 $768,600 Liabilities and Equity Accounts payable Accruals Notes payable Total current liabilities Long-term debt Total liabilities Common stock $ 94,500 47,250 26,262 $168,012 94,500 $262,512 444,600 $ 90,000 45,000 9,000 $144,000 90,000 $234,000 444,600 44,00 Long-term uebt Total liabilities Common stock Retained earnings Total common equity Total liabilities and equity $262,512 444,600 99,938 $544,538 $807,050 90,000 $234,000 444,600 90,000 $534,600 $768,600 2-19 Begin with the partial model in the file Ch02 Build a Model.xlsx on the textbook's website. Build a Model: Free a. Using the financial statements shown below for Lan & Chen Technologies, calculate net Cash Flows, EVA, operating working capital, total net operating capital, net operating profit after taxes, and MVA free cash flow, and return on invested capital for 2016. (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 2016, the year-end closing stock price was S65 per share, and the after-tax cost of capital was 8%. Calculate EVA and MVA for 2016 Lan & Chen Technologies: Income Statements for Year Ended December 31 (Thousands of Dollars) 2016 2015 Sales Expenses excluding depreciation and amortization EBITDA Depreciation and amortization EBIT Interest expense Pre-tax earnings Taxes (40%) Net income Common dividends Addition to retained earnings $945,000 812,700 132,300 33,100 99,200 10,470 $ 88,730 35,492 $ 53,238 $ 43,300 $9.938 $900,000 774,000 126,000 31,500 94,500 8,600 $ 85,900 34,360 $ 51,540 $ 41,230 $ 10,310 Lan & Chen Technologies: December 31 Balance Sheets 2016 2015 Assets Cash and cash equivalents Short-term investments Accounts receivable Inventories Total current assets Net fixed assets Total assets $ 47,250 3,800 283,500 141,750 $476,300 330,750 $807,050 $ 45,000 3,600 270,000 135,000 $453,600 315,000 $768,600 Liabilities and Equity Accounts payable Accruals Notes payable Total current liabilities Long-term debt Total liabilities Common stock $ 94,500 47,250 26,262 $168,012 94,500 $262,512 444,600 $ 90,000 45,000 9,000 $144,000 90,000 $234,000 444,600 44,00 Long-term uebt Total liabilities Common stock Retained earnings Total common equity Total liabilities and equity $262,512 444,600 99,938 $544,538 $807,050 90,000 $234,000 444,600 90,000 $534,600 $768,600
