In: Finance
Rhodes Corporation: Income Statements for Year Ending December 31 (Millions of Dollars)
2016 | 2015 | ||
Sales | $7,700.0 | $7,000.0 | |
Operating costs excluding depreciation | 6,160.0 | 5,950.0 | |
Depreciation and amortization | 177.0 | 154.0 | |
Earnings before interest and taxes | $1,363.0 | $896.0 | |
Less Interest | 166.0 | 151.0 | |
Pre-tax income | $1,197.0 | $745.0 | |
Taxes (40%) | 478.8 | 298.0 | |
Net income available to common stockholders | $718.2 | $447.0 | |
Common dividends | $646.0 | $358.0 |
Rhodes Corporation: Balance Sheets as of December 31 (Millions of Dollars)
2016 | 2015 | ||
Assets | |||
Cash | $89.0 | $77.0 | |
Short-term investments | 39.0 | 35.0 | |
Accounts receivable | 966.0 | 840.0 | |
Inventories | 1,663.0 | 1,330.0 | |
Total current assets | $2,757.0 | $2,282.0 | |
Net plant and equipment | 1,771.0 | 1,540.0 | |
Total assets | $4,528.0 | $3,822.0 | |
Liabilities and Equity | |||
Accounts payable | $564.0 | $490.0 | |
Accruals | 756.0 | 630.0 | |
Notes payable | 154.0 | 140.0 | |
Total current liabilities | $1,474.0 | $1,260.0 | |
Long-term debt | 1,540.0 | 1,400.0 | |
Total liabilities | $3,014.0 | $2,660.0 | |
Common stock | 1,307.8 | 1,028.0 | |
Retained earnings | 206.2 | 134.0 | |
Total common equity | $1,514.0 | $1,162.0 | |
Total liabilities and equity | $4,528.0 | $3,822.0 |
Using Rhodes Corporation's financial statements (shown above), answer the following questions.
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 |
What is the ROIC for 2016?
ROIC = (Net Income – Dividend) / (Debt + Equity)
= (345.36-311)/(575+975) =3%
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?