In this section you are required to do financial ratio and cash flow analysis using the balance sheet, income statement and summary cash flow information provided in Appendix A.

Financial Ratio and Cash Flow Analysis.

(A) Calculate the following financial ratios for 2016. Use only year-end values (DO NOT use average values) (30 marks).

LIQUIDITY

Quick Ratio (QR)

Current Ratio (CR)

ASSET UTILIZATION

Total Assets Turnover (TAT)

Inventory Turnover (IT)

Receivables Turnover (RT)

LEVERAGE

Debt-Equity Ratio (D/E)

Interest Coverage (INT Cov)

PROFITABILITY

Operating Profit Margin (OPM)

Net Profit Margin (NPM)

Return on Equity (ROE)

(B) Calculate the ROE for FLT using the DuPont model. Clearly show your workings (3 marks).

(C) Measures of Cash Flow (12 marks)Using the financial statements calculate the following two measures of cash flows for 2016. Answer in the box provided by clearly showing your workings. Use a tax rate of 30%.

Free Cash flow to the Firm (FCFF) (6 marks)

Free Cash Flow to the Equity (FCFE) (6 marks)

FY 2014 2,212.40 1,818.00 394.40 FY 2015 FY 2016 2,367.40 2,640.30 2,009.90 2,278.20 357.60 362.20 86.99 94.44 90.85 53.80 66.10 54.10 3.10 3.50 1.40 427.95 387.39 389.14 - 29.50 24.30 28.10 15.00 -5.10 -3.80 3.50 3.10 -1.40 379.95 116.86 In Millions of $AUD Revenue -COGS Gross Profit + Other Operating Revenue - Depreciation & Amortization - Other Operating Expenses EBIT - Interest Expense - Foreign Exchange Losses (Gains) - Net Non-Operating Losses (Gains) Pre-tax Income - Income Tax Expense Net Income (loss) In Millions of $AUD Assets + Cash & Near Cash Items + Short-Term Investments + Accounts Receivable + Inventories Total Current Assets + Net Fixed Assets + Gross Fixed Assets - Accumulated Depreciation + Other Long-Term Assets Total Long-Term Assets Total Assets 365.09 109.74 255.34 FY 2015 366.24 100.49 265.75 FY 2016 263.09 FY 2014 1,261.70 1,378.00 1,316.00 204.50 41.20 75.70 537.60 635.50 672.20 47 63.6 70.5 2,152.80 1,887.50 161.00 2,263.20 216.30 196.30 383.10 465.60 533.30 222.10 269.30 317.00 361.90 438.90 521.80 522.90 635.20 738.10 2,410.40 2,788.00 3,001.30 Liabilities & Shareholders' Equity + Accounts Payable 1040.5 1056.2 1487.1 + Short-Term Borrowings 42.90 32.80 76.80 Total Current Liabilities 1261.20 1452.50 1566.70 + Long-Term Borrowings 51.4 65.30 88.60 Total Long-Term Liabilities 51.40 65.30 88.60 Total Liabilities 1312.60 1517.80 1655.40 + Share Capital 363.76 432.64 423.35 + Retained Earnings 734.04 837.49 922.60 Total Equity 1097.80 1270.12 1345.95 Total Liabilities & Equity 2410.39 2787.97 3001.32 Cash Flow Information (inflows in positive & outflows in negative) In Millions of SAUD FY 2014 FY 2015 FY 2016 Capital Expenditures 55.43 -82.85 - 103.79 Disposal of Fixed Assets 0.00 0.00 17.20 Additional Long Term Debt 3.13 33.32 33.30 Cash Dividends Paid - Total -146.78 -153.11 -158.35 Reduction In Long Term Debt -1.48 -17.43 - 10.00