Using Rhodes Corporation%u2019s financial statements (shown below), answer the following questions.

a. What is the net operating profit after taxes (NOPAT) for 2012?

b. What are the amounts of net operating working capital for both years?

c. What are the amounts of total net operating capital for both years?

d. What is the FCF for 2012?

e. What is the ROIC for 2012?

f. 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? (Remember that a net use can be negative)

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

2012 2011

Sales $11,000 $10,000

Operating costs excluding depreciation 9,360 8,500

Depreciation and amortization 380 360

Earnings before interest and taxes $1,260 $1,140

Less interest 120 100

Earnings before taxes $1,140 $1,040

Taxes (40%) 456 416

Net income available to common shareholders 684 624

Common dividends $220 $200

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

2012 2011

Assets $550 $500

Cash 110 100

Short term investments 2,750 2,500

Accounts receivable 1,650 1,500

Inventories $5,060 $4,600

Total current assets 3,850 3,500

Total assets $8,910 $8,100

2012 2011

Liabilities and Equity

Accounts payable $1,100 $1,000

Accruals 550 500

Notes payable 384 200

Total current liabilities $2,034 $1,700

Long-term debt 1,100 1,000

Total liabilities $3,134 $2,700

Common stock 4,312 4,400

Retained earnings 1,464 1,000

Total common equity $5,776 $5,400

Total liabilities and equity $8,910 $8,100