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Free Cash Flows Rhodes Corporations financial statements are shown below. Rhodes Corporation: Income Statements for Year Ending December 31 (Millions of Dollars) 2020 2019 Sales

Free Cash Flows

Rhodes Corporations financial statements are shown below.

Rhodes Corporation: Income Statements for Year Ending December 31 (Millions of Dollars)

2020 2019
Sales $ 12,000 $ 10,000
Operating costs excluding depreciation 10,620 8,746
Depreciation and amortization 360 310
Earnings before interest and taxes $ 1,020 $ 944
Less interest 160 100
Pre-tax income $ 860 $ 844
Taxes (25%) 215 211
Net income available to common stockholders $ 645 $ 633
Common dividends $ 201 $ 200

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

2020 2019
Assets
Cash $ 650 $ 600
Short-term investments 120 100
Accounts receivable 2,750 2,500
Inventories 1,550 1,400
Total current assets $ 5,070 $ 4,600
Net plant and equipment 3,850 3,500
Total assets $ 8,920 $ 8,100
Liabilities and Equity
Accounts payable $ 1,300 $ 1,200
Accruals 650 600
Notes payable 190 100
Total current liabilities $ 2,140 $ 1,900
Long-term debt 1,300 1,200
Total liabilities $ 3,440 3,100
Common stock 3,736 3,700
Retained earnings 1,744 1,300
Total common equity $ 5,480 $ 5,000
Total liabilities and equity $ 8,920 $ 8,100

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

  1. 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.

    $ million

  2. 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: $ million

    2019: $ million

  3. 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: $ million

    2019: $ million

  4. 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

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

    %

  6. 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

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