Free Cash Flows

Rhodes Corporation's financial statements are shown below.

Rhodes Corporation: Income Statements for Year Ending December 31

(Millions of Dollars)

2020 2019

Sales $ 13,000 $ 11,000

Operating costs excluding depreciation 11,600 9,730

Depreciation and amortization 340 330

Earnings before interest and taxes $ 1,060 $ 940

Less interest 140 100

Pre-tax income $ 920 $ 840

Taxes (25%) 230 210

Net income available to common stockholders $ 690 $ 630

Common dividends $ 205 $ 200

Rhodes Corporation: Balance Sheets as of December 31 (Millions of Dollars)

2020 2019

Assets

Cash $ 650 $ 600

Short-term investments 220 200

Accounts receivable 2,750 2,500

Inventories 1,650 1,500

Total current assets $ 5,270 $ 4,800

Net plant and equipment 3,750 3,500

Total assets $ 9,020 $ 8,300

Liabilities and Equity

Accounts payable $ 1,300 $ 1,200

Accruals 650 600

Notes payable 368 200

Total current liabilities $ 2,318 $ 2,000

Long-term debt 1,300 1,200

Total liabilities $ 3,618 3,200

Common stock 3,917 4,100

Retained earnings 1,485 1,000

Total common equity $ 5,402 $ 5,100

Total liabilities and equity $ 9,020 $ 8,300

Suppose the federal-plus-state tax corporate tax is 25%. Answer the following questions.

What is the net operating profit after taxes (NOPAT) for 2020? Enter your answer in millions. For example, an answer of $1 million should be entered as 1, not 1,000,000. Round your answer to the nearest whole number.

$

795

million

What are the amounts of net operating working capital for both years? Enter your answers in millions. For example, an answer of $1 million should be entered as 1, not 1,000,000. Round your answers to the nearest whole number.

2020: $

3100

million

2019: $

2800

million

What are the amounts of total net operating capital for both years? Enter your answers in millions. For example, an answer of $1 million should be entered as 1, not 1,000,000. Round your answers to the nearest whole number.

2020: $

6850

million

2019: $

6300

million

What is the free cash flow for 2020? Enter your answer in millions. For example, an answer of $1 million should be entered as 1, not 1,000,000. Cash outflow, if any, should be indicated by a minus sign. Round your answer to the nearest whole number.

$

million

What is the ROIC for 2020? Round your answer to two decimal places.

%

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 million should be entered as 1, not 1,000,000. Round your answers to the nearest whole number.

After-tax interest payment $

million

Reduction (increase) in debt $

million

Payment of dividends $

million

Repurchase (Issue) stock $

million

Purchase (Sale) of short-term investments $

million