Free Cash Flows

$($All dollar values are provided in millions.$)$

$20182017$

Sales, ST Invest, Notes Pay, LT Debt factor increase $1\mathrm{.}1$ Sales $$1,500$

Operating costs as $\%$ of sales $77\mathrm{.}50\%$ Cash as $\%$ of sales $1\mathrm{.}00\%$

Cash factor increase $1\mathrm{.}2$ Accts Rec as $\%$ of sales $11\mathrm{.}00\%$

Accts. Rec factor increase $1\mathrm{.}1$ Inventory as $\%$ of sales $16\mathrm{.}00\%$

Inventory factor increase $1\mathrm{.}15$ Net Plant & Equip as $\%$ of sales $22\mathrm{.}00\%$

Net Plant & Equip factor increase $1\mathrm{.}1$ Accts Pay as $\%$ of sales $9\mathrm{.}00\%$

Accts Pay factor increase $1\mathrm{.}25$ Accruals as $\%$ of Sales $3\mathrm{.}00\%$

Accruals factor increase $1\mathrm{.}15$

Operating cost as $\%$ of sales $85\mathrm{.}00\%$

Depreciation as $\%$ of Net Plant & Equip $10\mathrm{.}00\%$ Depreciation as $\%$ of Net Plant & Equip $10\mathrm{.}00\%$

Interest rate $10\mathrm{.}00\%$ Interest rate $10\mathrm{.}00\%$

Tax rate $40\mathrm{.}00\%$ Tax rate $40\mathrm{.}00\%$

Payout rate $90\mathrm{.}00\%$ Payout rate $80\mathrm{.}00\%$

Short$-$term investments as $\%$ of sales $0\mathrm{.}50\%$

Notes payable as $\%$ of sales $2\mathrm{.}00\%$

Long$-$term debt as $\%$ of sales $20\mathrm{.}00\%$

Retained earnings multiple factor $1\mathrm{.}5$

Income Statements: $20182017$

Sales $$1,650\mathrm{.}00$ $$1,500\mathrm{.}00$

Operating costs excluding depreciation $1,278\mathrm{.}801,275\mathrm{.}00$

Depreciation and amortization $36\mathrm{.}333$

Earnings before interest and taxes $$335\mathrm{.}00$ $$192\mathrm{.}00$

Less interest $35\mathrm{.}532\mathrm{.}3$

Pre$-$tax income $$299\mathrm{.}50$ $$159\mathrm{.}80$

Taxes $119\mathrm{.}863\mathrm{.}9$

Net income available to common stockholders $$179\mathrm{.}70$ $$95\mathrm{.}90$

Common dividends $$161\mathrm{.}70$ $$76\mathrm{.}70$

Balance Sheets: $20182017$

Assets

Cash $$18\mathrm{.}00$ $$15\mathrm{.}00$

Short$-$term investments $8\mathrm{.}37\mathrm{.}5$

Accounts receivable $181\mathrm{.}5165$

Inventories $276240$

Total current assets $$483\mathrm{.}80$ $$427\mathrm{.}50$

Net plant and equipment $363330$

Total assets $$846\mathrm{.}80$ $$757\mathrm{.}50$

Liabilities and Equity

Accounts payable $$168\mathrm{.}80$ $$135\mathrm{.}00$

Accruals $51\mathrm{.}845$

Notes payable $3330$

Total current liabilities $$253\mathrm{.}50$ $$210\mathrm{.}00$

Long$-$term debt $330300$

Total liabilities $$583\mathrm{.}50$ $$510\mathrm{.}00$

Common stock $216\mathrm{.}5218\mathrm{.}7$

Retained earnings $46\mathrm{.}728\mathrm{.}8$

Total common equity $$263\mathrm{.}30$ $$247\mathrm{.}50$

Total liabilities and equity $$846\mathrm{.}80$ $$757\mathrm{.}50$

FORMULAS

NOPAT$2018$ $$201\mathrm{.}00201$

NOWC$2018$ $$255\mathrm{.}00$ $$254\mathrm{.}90$

NOWC$2017$ $$330\mathrm{.}00$ $$330\mathrm{.}00$

Total net operating capital$2018$ $$618\mathrm{.}00$ $$618\mathrm{.}00$

Total net operating capital$2017$ $$660\mathrm{.}00$ $$660\mathrm{.}00$

Free cash flow$2018$ $$243\mathrm{.}00$ $$243\mathrm{.}00$

ROIC$201832\mathrm{.}50\%0\mathrm{.}325242718$

Uses of free cash flow: Amount Formula

After$-$tax interest payment

Reduction $($increase$)$ in debt

Payment of dividends

Repurchase $($issue$)$ stock

Purchase $($sale$)$ of short$-$term investments

Total