Free Cash Flows (All dollar values are provided in millions.) 2018 Sales, ST Invest, Notes Pay, LT Debt factor increase 2017 1.15 Operating costs as % of sales 77.50% Sales Cash as % of sales $2,000 1.20% Cash factor increase 1.20 Accts Rec as % of sales 11.00% Accts. Rec factor increase 1.10 Inventory as % of sales 23.00% Inventory factor increase 1.25 Net Plant & Equip as % of sales 22.00% Net Plant & Equip factor increase 1.25 Accts Pay as % of sales 7.00% Accts Pay factor increase 1.25 Accruals as % of Sales 6.00% Accruals factor increase 1.15 Operating cost as % of sales 85,00% Depreciation as % of Net Plant & Equip 10.00% Depreciation as % of Net Plant & Equip 10.00% Interest rate 10.00% Interest rate: 10.00% Tax rate 40.00% Tax rate 40.00% Payout rate 90.00% Payout rate 80.00% Short-term investments as % of sales 0.50% Notes payable as % of sales 2.00% Long-term debt as % of sales 20.00% Retained earnings multiple factor 1.50 22 Income Statements: 2018 2017 23 Sales $2,300.0 $2,000.0 24 Operating costs excluding depreciation 1,782.5 1,700.0 25 Depreciation and amortization 55.0 44.0 26 Earnings before interest and taxes $462.5 $256.0 27 Less interest 49.5 43.0 28 Pre-tax income $413.1 $213.0 29 Taxes 165.2 85.2 30 Net income available to common stockholders $247.8 $127.8 $223.0 $102.2 31 Common dividends 32 33 Balance Sheets: 2018 2017 34 Assets 35 Cash $28.8 $24.0 36 Short-term investments 11.5 10.0 37 Accounts receivable 242.0 220.0 38 Inventories 575.0 460.0 39 Total current assets $857.3 $714.0 40 Net plant and equipment 550.0 440.0 41 Total assets $1,407.3 $1,154.0 42 43 Liabilities and Equity 44 Accounts payable $175.0 $140.0 45 Accruals 138.0 120.0 46 Notes payable 46.0 40.0 47 Total current liabilities $359.0 $300.0 48 Long-term debt 460.0 400.0 49 Total liabilities $819.0 $700.0 50 Common stock 525.2 415.7 51 Retained earnings 63.1 38.3 52 Total common equity $588.3 $454.0 53 Total liabilities and equity $1,407.3 $1.154.0 FORMULAS NOPAT 2018 NOWC2018 #N/A #N/A NOWC2017 #N/A Total net operating capital2018 #N/A Total net operating capital 2017 #N/A Free cash flow2018 #N/A ROIC 2018 #N/A Uses of free cash flow. After-tax interest payment #N/A Reduction (increase) in debt #N/A Payment of dividends #N/A Repurchase (issue) stock #N/A Purchase (sale) of short-term investments #N/A Total #N/A a. What is the net operating profit after taxes (NOPAT) for 2018? Enter your answer in millions. For example, an answer of $1.2 million should be entered as 1.2, not 1,200,000. Do not round intermediate calculations. Round your answer to one decimal place. $ million b. What are the amounts of net operating working capital for both years? Enter your answers in millions. For example, an answer of $1.2 million should be entered as 1.2, not 1,200,000. Do not round intermediate calculations. Round your answers to one decimal place. 2018 $ 2017 $ million million c. What are the amounts of total net operating capital for both years? Enter your answers in millions. For example, an answer of $1.2 million should be entered as 1.2, not 1,200,000. Do not round intermediate calculations. Round your answers to one decimal place. 2018 $ 2017 $ million million d. What is the free cash flow for 2018? Enter your answer in millions. For example, an answer of $1.2 million should be entered as 1.2, not 1,200,000. Do not round intermediate calculations. Round your answer to one decimal place. $ million e. What is the ROIC for 2018? Round your answer to one decimal place. %% 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 answers in millions. For example, an answer of $1.2 million should be entered as 1.2, not 1,200,000. Do not round intermediate calculations. Round your answers to one decimal place. After-tax interest payment $ million Reduction (increase) in debt $ million. Payment of dividends $ million. Repurchase (Issue) stock $ million Purchase (Sale) of short-term million investments