Chapter . 12 Problem . Start with the partial model in the file Ch 1 2 PYT Build a Medal List on the textbook's Web site , which contains Henley Corporation's most recent financial statements . Use the following ratios and other selected information for the current and projected years to answer the next questions . Income Statement for the Year Ending December 31 ( Millions of Dollars! 2010 Not Sales Costs ( except depreciation !* Depreciation 60. 0 Total operating costs 6:36. 0 Earning before int . & tax $ 16:40 Loss interest 32.0 Earning before taxes 132.0 Taxes (40%/6 ) 52. 8 Not income before prof . div . 79. 2 Preferred div . Net income avail . for com . div . TT. ` Common dividends 31 . 1 Addition to retained earnings 46. 7 Number of shares ( in millions ) 10 Dividends per share $ 3.11 Balance Sheets for December 31 ( Millions of Dollars ! Assets 2016 Liabilities and Equity 2016 Cash 5. &. D Accounts Payable 5 16. 0 Short - term investments 20.0 Notes payable 40. 0 Accounts receivable Accruals 40. 0 5 Inventories 160. 0 Total current liabilities 96. 0 Total current assets 26.6. 0 Long-term bonds 3:00. 0 Not plant and equipment 6.00. 0 Preferred stock 15. 0 Total Assets | Far plus FILI 5 257. 0 Retained earnings 200.0 Common Equity 457 . 0 Total liabilities and equity*Projected ratios and selected information for the current and projected years are shown below . Inputs Actual Projected Projected Projected Projected 12/31/10 12/31/17 12131/18 12/31/14 12/31/20 Sales Growth Rate 10% Costs / Sales 729/0 72% 72%/0 72%/6 Depreciation" Not PPE] 10% 10%/} Cash / Sales 196 |Acct . Rec.\\/Sales 10% 10%/6 10% Inventories / Sales 20% 20% 20%/} 20% 20% |Not PPE\\/Sales | Acct . Pay.\\/Sales Accruals / Sales THE rate Weighted average cost of capital ( WALL ! 10. 5%/} 10. 5%/6 10. 5%/6) 10. 5%/} 10. 5%/6)a. Forecast the parts of the income statement and balance sheets necessary to calculate free cash flow . Partial Income Statement for the Year Ending December 31 ( Millions of Dollars! Actual Projected Projected Projected Projected Income Statement Items 12131/ 10 12131/17 12131/18 12/31/19 12/31/20 Not Sales $6.00. 0 Costs ( except depreciation ! $576.0 Depreciation $60. 0 Total operating costs $630. 0 Earning before int . & tax $164.0 Partial Balance Sheets for December 3 1 ( Millions of Dollars! Actual Projected Projected Projected Operating Assets Projected 1.2131/ 16 12131/17 12131/18 12/31/1.9 12/31/20 Cash ACCOUNTS receivable 56.0. 0 Inventories $160. 0 Not plant and equipment $600. 0 Operating Liabilities Accounts Payable $16.0 Accruals* $40.0
