Q1: What is Computron's net operating profit after taxes?

Q2: What is Computron's free cash flow?

Q3: What What are Computron's "net uses" of its FCF?

Q4: Calculate Computron's return on invested capital. Computron has a 10% cost of capital. Do you think Computron's growth added value?

2. DULJ most recent Sales en the sales growth at sales avis sowth rate sources of financing 3. Looking at the statement of a company's cash position over the last coupil 4. Looking at the income statement, what are rement, what are the company's mo net income? Over the past several years, what has been the What has been the growth rate in net income? s of banking experi board of Computron Ind lini Case opened new sales offices outside its be con's results were not sa sted of its president and vice-pr irs home text not satistas ice-presiden when directors all local businesspeople), was most upset whe ore unhappy, and Donna Jamison, a graduate of the University of Tennessee with four ence, was recently brought in as assistant to the chairman of the boar tries, a manufacturer of electronic calculators. The company doubled its plant capacity, opened new sales offi tory, and launched an expensive advertising campaign. Computron's ro tory, to put it mildly. Its board of directors, which consisted of its pre plus its major stockholders (who were all local businesspeople). learned how the expansion was going. Suppliers were being paid late the bank was complaining about the deteriorating situation and threaten As a result. Al Watkins, Computron's president, was informed that cha made--and quickly or he would be fired. At the board's vaid late and were unhap d threatening to cut offc med that changes would have it off crea uld have the mison was green fron's chairman and laro nd to help nurse the com could be fired. At the board's insistence, Donna Jamison the job of assistant to Fred Carnpo, a retired banker who was Computron's est stockholder. Campo agreed to give up a few of his golfing days and to help pany back to health, with Jamison's assistance. Jamison began by gathering financial statements and other data. 2009 2010 Balance Sheets Hoets Cash Short-term investments Accounts receivable Inventorics Total current assets Gross fixed assets Less: Accumulated depreciation Net fixed assets Total assets LOTS 9,000 and 48,600 bonato grimago 351,200 715,200 $1,124,000 491,000 Coro 146,200 $ 344,800 TOO $1,468,800 $ 7,282 20,000 632,16) 1,287,36 $1,946,802 1,202,950 de nos 263,161 $ 939.790 $2,886,59 Liabilities and Equity Accounts payable Notes payable Accruals Total current liabilities $ 145,600 do brutale 200,000 torn 136,000 S 481,600 S 324,000 720,00 284,960 $1,328,900 WARRA he warra. ranty se Shippine under does. or does Long-term debt Counmon stock (100,000 shares) Retained earnings Total equity Total liabilities and equiry 2010 1,000,000 460,000 2009 323,432 460.000 203,768 $ 663,768 $1,468,800 97.632 $ 557,632 $2,886,592 2009 2010 Income Statements Sales Cost of goods sold Other expenses Depreciation Total operating costs EBIT Interest expense $3,432,000 2,864,000 340,000 18,900 $3,222,900 $ 209,100 62,500 $ 146,600 58,640 $ 87,960 $5,834,400 4,980,000 720,000 116,960 $5,816.960 $ 17,440 176.000 (S 158,560) (63,424) ($ 95,136) EBT Taxes (40%) Net income Other Data Stock price Shares outstanding $ 8.50 $ EPS DPS $ $ 0.880 0.220 6.00 100,000 0.951) 0.110 40% ($ $ Tax rate 2010 (S 95,136) 116,960 Statement of Cash Flows Operating Activities Net income Adjustments: Noncash adjustments: Depreciation Changes in working capital: Change in accounts receivable Change in inventories Change in accounts payable Change in accruals Net cash provided (used) by operating activities Investing Activities Cash used to acquire fixed assets Change in short-term investments Net cash provided (used) by investing activities (280,960) (572,160) 178,400 148,960 ($ 503,936 ($ 711,950) 28,600 ($ 683,350) ndamental Concepts of Corporate Finance 2010 $ 520,000 676,568 Financing Activities Change in notes payable Change in long-term debt Change in common stock Payment of cash dividends Net cash provided (used) by financing activities Summary Net change in cash Cash at beginning of year Cash at end of year (11,000) $1,185,568 ($ 1,718) 9,000 7,282 $ mo 2. DULJ most recent Sales en the sales growth at sales avis sowth rate sources of financing 3. Looking at the statement of a company's cash position over the last coupil 4. Looking at the income statement, what are rement, what are the company's mo net income? Over the past several years, what has been the What has been the growth rate in net income? s of banking experi board of Computron Ind lini Case opened new sales offices outside its be con's results were not sa sted of its president and vice-pr irs home text not satistas ice-presiden when directors all local businesspeople), was most upset whe ore unhappy, and Donna Jamison, a graduate of the University of Tennessee with four ence, was recently brought in as assistant to the chairman of the boar tries, a manufacturer of electronic calculators. The company doubled its plant capacity, opened new sales offi tory, and launched an expensive advertising campaign. Computron's ro tory, to put it mildly. Its board of directors, which consisted of its pre plus its major stockholders (who were all local businesspeople). learned how the expansion was going. Suppliers were being paid late the bank was complaining about the deteriorating situation and threaten As a result. Al Watkins, Computron's president, was informed that cha made--and quickly or he would be fired. At the board's vaid late and were unhap d threatening to cut offc med that changes would have it off crea uld have the mison was green fron's chairman and laro nd to help nurse the com could be fired. At the board's insistence, Donna Jamison the job of assistant to Fred Carnpo, a retired banker who was Computron's est stockholder. Campo agreed to give up a few of his golfing days and to help pany back to health, with Jamison's assistance. Jamison began by gathering financial statements and other data. 2009 2010 Balance Sheets Hoets Cash Short-term investments Accounts receivable Inventorics Total current assets Gross fixed assets Less: Accumulated depreciation Net fixed assets Total assets LOTS 9,000 and 48,600 bonato grimago 351,200 715,200 $1,124,000 491,000 Coro 146,200 $ 344,800 TOO $1,468,800 $ 7,282 20,000 632,16) 1,287,36 $1,946,802 1,202,950 de nos 263,161 $ 939.790 $2,886,59 Liabilities and Equity Accounts payable Notes payable Accruals Total current liabilities $ 145,600 do brutale 200,000 torn 136,000 S 481,600 S 324,000 720,00 284,960 $1,328,900 WARRA he warra. ranty se Shippine under does. or does Long-term debt Counmon stock (100,000 shares) Retained earnings Total equity Total liabilities and equiry 2010 1,000,000 460,000 2009 323,432 460.000 203,768 $ 663,768 $1,468,800 97.632 $ 557,632 $2,886,592 2009 2010 Income Statements Sales Cost of goods sold Other expenses Depreciation Total operating costs EBIT Interest expense $3,432,000 2,864,000 340,000 18,900 $3,222,900 $ 209,100 62,500 $ 146,600 58,640 $ 87,960 $5,834,400 4,980,000 720,000 116,960 $5,816.960 $ 17,440 176.000 (S 158,560) (63,424) ($ 95,136) EBT Taxes (40%) Net income Other Data Stock price Shares outstanding $ 8.50 $ EPS DPS $ $ 0.880 0.220 6.00 100,000 0.951) 0.110 40% ($ $ Tax rate 2010 (S 95,136) 116,960 Statement of Cash Flows Operating Activities Net income Adjustments: Noncash adjustments: Depreciation Changes in working capital: Change in accounts receivable Change in inventories Change in accounts payable Change in accruals Net cash provided (used) by operating activities Investing Activities Cash used to acquire fixed assets Change in short-term investments Net cash provided (used) by investing activities (280,960) (572,160) 178,400 148,960 ($ 503,936 ($ 711,950) 28,600 ($ 683,350) ndamental Concepts of Corporate Finance 2010 $ 520,000 676,568 Financing Activities Change in notes payable Change in long-term debt Change in common stock Payment of cash dividends Net cash provided (used) by financing activities Summary Net change in cash Cash at beginning of year Cash at end of year (11,000) $1,185,568 ($ 1,718) 9,000 7,282 $ mo