Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Rhodes Corporation: Income Statements for Year Ending December 31 (Millions of Dollars) 2018 2017 Sales $4,600.0 $4,000.0 Operating costs excluding depreciation 3,680.0 3,400.0 Depreciation and

Rhodes Corporation: Income Statements for Year Ending December 31 (Millions of Dollars)

2018 2017
Sales $4,600.0 $4,000.0
Operating costs excluding depreciation 3,680.0 3,400.0
Depreciation and amortization 156.0 120.0
Earnings before interest and taxes $764.0 $480.0
Less Interest 99.0 86.0
Pre-tax income $665.0 $394.0
Taxes (40%) 266.0 157.6
Net income available to common stockholders $399.0 $236.4
Common dividends $359.0 $189.0

Rhodes Corporation: Balance Sheets as of December 31 (Millions of Dollars)

2018 2017
Assets
Cash $60.0 $52.0
Short-term investments 23.0 20.0
Accounts receivable 750.0 600.0
Inventories 1,092.0 840.0
Total current assets $1,925.0 $1,512.0
Net plant and equipment 1,560.0 1,200.0
Total assets $3,485.0 $2,712.0
Liabilities and Equity
Accounts payable $352.0 $320.0
Accruals 384.0 320.0
Notes payable 92.0 80.0
Total current liabilities $828.0 $720.0
Long-term debt 920.0 800.0
Total liabilities $1,748.0 $1,520.0
Common stock 1,626.0 1,121.0
Retained earnings 111.0 71.0
Total common equity $1,737.0 $1,192.0
Total liabilities and equity $3,485.0 $2,712.0

Using Rhodes Corporation's financial statements (shown above), answer the following questions.

  1. What is the net operating profit after taxes (NOPAT) for 2018? Enter your answer in millions. For example, an answer of $1.2 million should be entered as 1.2, not 1,200,000. Round your answer to one decimal place. $ million
  2. What are the amounts of net operating working capital for both years? Enter your answers in millions. For example, an answer of $1 million should be entered as 1, not 1,000,000. Round your answers to the nearest whole number. 2018: $ million 2017: $ million
  3. What are the amounts of total net operating capital for both years? Enter your answers in millions. For example, an answer of $1 million should be entered as 1, not 1,000,000. Round your answers to the nearest whole number. 2018: $ million 2017: $ million
  4. What is the free cash flow for 2018? Enter your answer in millions. For example, an answer of $1.2 million should be entered as 1.2, not 1,200,000. Cash outflow, if any, should be indicated by a minus sign. Round your answer to one decimal place. $ million
  5. What is the ROIC for 2018? Round your answer to two decimal places. %
  6. How much of the FCF did Rhodes use for each of the following purposes: after-tax interest, net debt repayments, dividends, net stock repurchases, and net purchases of short-term investments? (Hint: Remember that a net use can be negative.) Enter your answer in millions. For example, an answer of $1.2 million should be entered as 1.2, not 1,200,000. Round your answers to one decimal place.
    After-tax interest payment $ million
    Reduction (increase) in debt $ million
    Payment of dividends $ million
    Repurchase (Issue) stock $ million
    Purchase (Sale) of short-term investments $ million

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Marketplace Lending Financial Analysis And The Future Of Credit Integration Profitability And Risk Management

Authors: Ioannis Akkizidis, Manuel Stagars

1st Edition

1119099161, 978-1119099161

More Books

Students also viewed these Finance questions