Question
Using the financial statements below for Joshua Corp. answer the following questions: Calculate NOPAT for 2019 (using 25% tax rate) Calculate FCF for 2019 What
Using the financial statements below for Joshua Corp. answer the following questions:
- Calculate NOPAT for 2019 (using 25% tax rate)
- Calculate FCF for 2019
- What is the ROIC for 2019
- How much of FCF from 2019 did they use for each of the following purposes: after-tax interest, net debt repayments, dividends, net stock repurchase, and net purchases of short-term investments?
These are my answers, please tell me if they are correct and if they are incorrect I would like to know how to get to the correct solution.
a.) EBIT * (1-Tax Rate) 72,740 * (.75) = 54,555
b.) FCF = NOPAT - Change in operating capital
NOWC (2019) = 57,771, NOWC (2018) =41,520
FCF = 54,555 - 39,348 = 15,207
c.) ROIC = NOPAT / Total Operating Capital
54,555 / 280,868 = .1942 = 19.42%
d.) Interest = 4,305
NDR = (22,791)
Dividends = 18,125
Stock Repur. = 0
S-T Invest = 519
Answer = ?
Joshua Corp. Income Statements ($ thousands) Sales Operating costs excluding depreciation Depreciation and amortization Other operating expenses EBIT - earnings before interest and taxes Interest expense Taxable income Taxes (25%) Net Income Common dividends Addition to retained earnings 2019 $420,000 300,000 19,660 27,600 72,740 5,740 67,000 16,750 50,250 18,125 32,125 2018 $400,000 298,000 18,000 22,000 62,000 4,460 57,540 14,385 34,524 17,262 17,262 2019 2018 Joshua Corp. Balance Sheets ($ thousands) Assets Cash Short-term investments Accounts receivable Inventories Total current assets Net plant and equipment Total assets $21,000 3,759 52,500 84,000 161,259 223,097 $384,356 $20,000 3,240 48,000 56,000 127,240 200,000 $327,240 Liabilities and Equity Accounts payable Accruals Notes payable Total current liabilities Long-term debt Total liabilities Common stock Retained eamings Total common equity Total liabilities and equity $33,600 12,600 19,929 66,129 67,662 133,791 178,440 72,125 250,565 $384,356 $32,000 12,000 6,480 50,480 58,320 108,800 178,440 40,000 218,440 $327,240Step by Step Solution
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