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Rhodes Corporation's financial statements are shown below. Rhodes Corporation: Income Statements for Year Ending December 31 (Millions of Dollars) 2022 2021 Sales $ 11,000 $
Rhodes Corporation's financial statements are shown below.
Rhodes Corporation: Income Statements for Year Ending December 31 (Millions of Dollars)
2022 | 2021 | ||||
Sales | $ | 11,000 | $ | 10,000 | |
Operating costs excluding depreciation | 9,490 | 8,634 | |||
Depreciation and amortization | 390 | 370 | |||
Earnings before interest and taxes | $ | 1,120 | $ | 996 | |
Less interest | 120 | 100 | |||
Pre-tax income | $ | 1,000 | $ | 896 | |
Taxes (25%) | 250 | 224 | |||
Net income available to common stockholders | $ | 750 | $ | 672 | |
Common dividends | $ | 205 | $ | 200 |
Rhodes Corporation: Balance Sheets as of December 31 (Millions of Dollars)
2022 | 2021 | ||||
Assets | |||||
Cash | $ | 550 | $ | 500 | |
Short-term investments | 130 | 100 | |||
Accounts receivable | 2,750 | 2,500 | |||
Inventories | 1,750 | 1,500 | |||
Total current assets | $ | 5,180 | $ | 4,600 | |
Net plant and equipment | 3,750 | 3,500 | |||
Total assets | $ | 8,930 | $ | 8,100 | |
Liabilities and Equity | |||||
Accounts payable | $ | 1,100 | $ | 1,000 | |
Accruals | 550 | 500 | |||
Notes payable | 352 | 200 | |||
Total current liabilities | $ | 2,002 | $ | 1,700 | |
Long-term debt | 1,100 | 1,000 | |||
Total liabilities | $ | 3,102 | 2,700 | ||
Common stock | 4,183 | 4,300 | |||
Retained earnings | 1,645 | 1,100 | |||
Total common equity | $ | 5,828 | $ | 5,400 | |
Total liabilities and equity | $ | 8,930 | $ | 8,100 |
Suppose the federal-plus-state tax corporate tax is 25%. Answer the following questions.
- What is the net operating profit after taxes (NOPAT) for 2022? Enter your answer in millions. For example, an answer of $1 million should be entered as 1, not 1,000,000. Round your answer to the nearest whole number.
$ million
- 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.
2022: $ million
2021: $ million
- 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.
2022: $ million
2021: $ million
- What is the free cash flow for 2022? Enter your answer in millions. For example, an answer of $1 million should be entered as 1, not 1,000,000. Cash outflow, if any, should be indicated by a minus sign. Round your answer to the nearest whole number.
$ million
- What is the ROIC for 2022? Round your answer to two decimal places.
%
- 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 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.
After-tax interest payment $ million Reduction (increase) in debt $ million Payment of dividends $ million Repurchase (Issue) stock $ million Purchase (Sale) of short-term i
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