Question 6 (total of 25 points): Over the last year, Fiscal 2020, Atlas Inc., had the following results. The company had revenues of $1.27B last year, yielding operating income (or EBIT) of $258M, and net income of $162M. The company had an effective tax rate of 19.2% for the year.

The company has a simple balance sheet, current assets at the end of Fiscal 2020 was $227M (Fiscal 2019, $198M) and consisted of inventory, accounts receivable and a small amount of cash for operations. The only long-term asset is property, plant and equipment, net, at the end of Fiscal 2020 was $253M (Fiscal 2019, $239M).[1]

Current liabilities totaled $224M at end of Fiscal 2020, ($174M Fiscal 2019) - this included $74M in short-term debt, ($34M in Fiscal 2019). The only long-term liability is debt, this amounted to $182M at end of Fiscal 2020, ($123M in Fiscal 2019).

Finally, the closing equity for Fiscal 2020 is $74M, ($140M in Fiscal 2019).

For Fiscal 2020, the Operating Margin and Net Income Margin were ______________________________ and ____________________________, respectively?

For Fiscal 2020, the Average Total Asset Turn and Average Equity Multiplier were ______________________________ and ____________________________, respectively?

Using the previous answers, demonstrate the basic DuPont Equation and show how calculated ROE from first principles and from the DuPont Equation are the same:

Calculate FCFE for Fiscal 2020 using two approaches, change in operating accounts and changes in debt; AND change in shareholders' equity. Show how the two are the same _____________________________________________________ and ____________________________________________________.

Using the previously calculated FCFE and Net Income, what is the reinvestment rate on Shareholders' Equity for Fiscal 2020 _______________________________________________?

IF, the company maintains the same ROE and investment rates for next year, how quickly should Shareholders' Equity and Net Income grow next year ____________________________________________?

Invested Capital for Fiscal 2020 and Fiscal 2019 were _____________________ and ___________________?

What was NOPAT and ROIC for FISCAL 2020 ____________________ and ___________________?

Calculate FCFF for Fiscal 2020 using two approaches, change in operating accounts; and change in invested capital. Show how the two are the same _____________________________________________________ and ____________________________________________________.

Using the previously calculated FCFF and NOPAT, what is the reinvestment rate on Invested Capital for Fiscal 2020 _______________________________________________?

IF, the company maintains the same ROIC and reinvestment rates for next year, how quickly should Invested Capital and NOPAT grow next year ____________________________________________?

[1] The change of $253M - 239M = $14M consist of $26M of gross capex less depreciation charged of $12M giving Capex, net of $14M.