Last year Rattner Robotics had $5 million in operating income (EBIT). Its depreciation expense was $1 million, its interest expense was $1 million, and its corporate tax rate was 40%. At year-end, it had $14 million in operating current assets, $3 million in accounts payable, $1 million in accruals, $2 million in notes payable, and $15 million in net plant and equipment. Assume Rattner has no excess cash. Rattner uses only debt and common equity to fund its operations. (In other words, Rattner has no preferred stock on its balance sheet.) Rattner had no other current liabilities. Assume that Rattners only noncash item was depreciation.

• What was the companys net income?
• What was its net operating working capital (NOWC)?
• What was its net working capital (NWC)?
• Rattner had $12 million in net plant and equipment the prior year. Its net operating working capital has remained constant over time. What is the companys free cash flow (FCF) for the year that just ended?
• Rattner has 500,000 common shares outstanding, and the common stock amount on the balance sheet is $5 million. The company has not issued or repurchased common stock during the year. Last years balance in retained earnings was $11.2 million, and the firm paid out dividends of $1.2 million during the year. Develop Rattners end-of-year statement of stockholders equity.
• If the firms stock price at year-end is $52, what is the firms market value added (MVA)?
• If the firms after-tax percentage cost of capital is 9%, what is the firms EVA at year-end?