Please show work, struggling to figure it out. Thank You
*For question 2-6. The following 2 years of financial information are for King Corporation. INCOME STATEMENTS (MILLIONS OF DOLLARS) 2018 2017 Sales $3,600.0 $3.000.0 Operating costs 3.060.0 2.550.0 EBITDA S 540.0 $ 450.0 Depreciation and amortization 90.0 75.0 Earnings before interest and taxes S 450.0 S 375.0 Interest 65,0 60.0 Earnings before taxes S 385.0 $ 315.0 Taxes (40%) 1940 1260 Net income available to common stockholders S 2310 S 1890 Common dividends S 181.5 $ 139.0 BALANCE SHEETS (MILLIONS OF DOLLARS) 2018 2017 Cash $36.0 S 30.0 Accounts receivable 540.0 450.0 Inventories 540.0 600.0 Total current assets $1.116.0 $1,080.0 Net plant and equipment 900.0 750.0 Total assets S2.0160 S1.830.0 Liabilities and equity: Accounts payable $ 324.0 $ 270.0 Accruals 216.0 180.0 Notes payable 2010 1550 Total current liabilities $ 741.0 $ 605.0 Long-term bonds 450.0 450.0 Total debt S1,191.0 $1.055.0 Common stock (50 million shares) 150.0 150.0 Retained earnings 675.0 625.0 Total common equity S 825.0 $ 775.0 Total liabilities and equity $2,016,0 $1.830.0 2. What is the amount of total operating capital (O.C) for 2018? O.C = NOWC+ Net fixed asset 3. What is the amount of Free Cash Flow for 2018? FCF = EBIT(1-Tax) - change in total operating capital investment 4. Calculate the ROIC for 2018 and interpret the result if cost of capital (WACC) = 10%. ROIC = NOPAT/Operating Capital 5. Using percentage of sales based proforma method, construct new Income statement, Balance sheet for year 2019, and find out the AFN amount. Assume sales increase by 20% in 2019. Currently, a firm utilizes 80% of capacity of fixed asset usage for sales. Assume Interest expense and depreciation will be the same amount as 2018. (Hint: capacity sales - SJ% of capacity). Also, a firm use the same dividend payout ratio as 2018. INCOME STATEMENTS (MILLIONS OF DOLLARS) 2018 2019 Sales $3,600.0 Operating costs 3,060,0 EBITDA $ $40.0 Depreciation and amortization 90.0 90 Earnings before interest and taxes $ 450.0 Interest 650 Earnings before taxes $ 385.0 Taxes (409) 1540 Net income available to common stockholders S 2310 Common dividends $ 1815 What is the amount of additional Retained earnings for year 2019? 4 pts Cash and marketable securities Accounts receivable Inventories Total current assets Net plant and equipment Total assets BALANCE SHEETS (MILLIONS OF DOLLARS) 2018 2019 $36.0 $ 432 540.0 5400 S1,116,0 9000 $2.0160 S 324.0 216,0 2010 Liabilities and equity: Accounts payable Accruals Notes payable Total current liabilities Long-term bonds Total debt Common stock (50 million shares) Retained earnings Total common equity Total liabilities and equity $ 741.0 $500 $1,191.0 150.0 6750 S 825.0 52.0160 6. AFN- Capacity sales
