Spreadsheet Problem

Laiho Industries 2001 and 2002 balance sheets in thousand thousands of dollars) are shown below:

20022001

Cash

$102,850

$ 89,725

Accounts receivable

103,365

85,527

Inventories

38,444

34,982

Total current assets

$244,659

$210,234

Net fixed assets

67,165

42,436

Total assets

$311,824

$252,670

Accounts payable

$ 30,761

$ 23,109

Accruals

30,477

22,656

Notes payable

16,717

14,217

Total current liabilities

$ 77,955

$ 59,982

Long-term debt

76,264

63,914

Total liabilities

$154,219

$123,896

Common stock

100,000

90,000

Retained earnings

57,605

38,774

Total common equity

$157,605

$128,774

Total liabilities and equity

$311,824

$252,670

A.The company's sales for 2002 were $455,150,000 and EBITDA was 15 percent of sales. Furthermore, depreciation amounted to 11% of net fixed assets, interest charges were $8,575,000, the state-plus-federal corporate tax rate was 40 percent, and Laiho pays 40 per cent of its net income out in dividends. Assume the firm has no amortization expense. Given this information, construct Laiho's 2002 income statement. (Hint: You might find it easier to select the balance sheets, then copy them, and then paste them to an excel worksheet. You might have to move the data around some in the worksheet to get things lined up properly.)

b. Next, construct the firm's statement of retained earnings for the year ending December 31, 2002, and then its 2002 statement of cash flows.

c. Calculate net operating working capital, total operating capital, net operating profit after taxes, operating cash flow, and free cash flow for 2002.

d. Calculate the firm's EVA and MVA for 2002. Assume that Laiho had 10 million shares outstanding, that the year-end closing stock price was $17.25 per share, and its after-tax cost of capital was 12 percent.