In: Finance
Problem 2-12
Free Cash Flows
Rhodes Corporation: Income Statements for Year Ending December 31 (Millions of Dollars)
2016 | 2015 | ||
Sales | $6,325.0 | $5,500.0 | |
Operating costs excluding depreciation | 4,744.0 | 4,675.0 | |
Depreciation and amortization | 191.0 | 160.0 | |
Earnings before interest and taxes | $1,390.0 | $665.0 | |
Less Interest | 136.0 | 118.0 | |
Pre-tax income | $1,254.0 | $547.0 | |
Taxes (40%) | 501.6 | 218.8 | |
Net income available to common stockholders | $752.4 | $328.2 | |
Common dividends | $677.0 | $263.0 |
Rhodes Corporation: Balance Sheets as of December 31 (Millions of Dollars)
2016 | 2015 | ||
Assets | |||
Cash | $70.0 | $61.0 | |
Short-term investments | 32.0 | 28.0 | |
Accounts receivable | 1,001.0 | 770.0 | |
Inventories | 1,645.0 | 1,265.0 | |
Total current assets | $2,748.0 | $2,124.0 | |
Net plant and equipment | 1,914.0 | 1,595.0 | |
Total assets | $4,662.0 | $3,719.0 | |
Liabilities and Equity | |||
Accounts payable | $619.0 | $495.0 | |
Accruals | 264.0 | 220.0 | |
Notes payable | 127.0 | 110.0 | |
Total current liabilities | $1,010.0 | $825.0 | |
Long-term debt | 1,265.0 | 1,100.0 | |
Total liabilities | $2,275.0 | $1,925.0 | |
Common stock | 2,213.6 | 1,696.0 | |
Retained earnings | 173.4 | 98.0 | |
Total common equity | $2,387.0 | $1,794.0 | |
Total liabilities and equity | $4,662.0 | $3,719.0 |
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 |