Question

Free Cash Flows Rhodes Corporation’s financial statements are shown below. Rhodes Corporation: Income Statements for Year Ending December 31 (Millions of Dollars) 2020 2019 Sales $ 11,000 $ 10,000 Operating costs excluding depreciation 9,566 8,676 Depreciation and amortization 410 360     Earnings before interest and taxes $ 1,024 $ 964 Less interest 220 200     Pre-tax income $ 804 $ 764 Taxes (25%) 201 191 Net income available to common stockholders $ 603 $ 573 Common dividends $ 202 $ 200 Rhodes Corporation: Balance Sheets as of December 31 (Millions of Dollars) 2020 2019 Assets Cash $ 450 $ 400 Short-term investments 130 100 Accounts receivable 2,750 2,500 Inventories 1,850 1,800     Total current assets $ 5,180 $ 4,800 Net plant and equipment 3,850 3,500 Total assets $ 9,030 $ 8,300 Liabilities and Equity Accounts payable $ 900 $ 800 Accruals 450 400 Notes payable 186 100     Total current liabilities $ 1,536 $ 1,300 Long-term debt 900 800     Total liabilities $ 2,436 2,100 Common stock 5,093 5,100 Retained earnings 1,501 1,100     Total common equity $ 6,594 $ 6,200 Total liabilities and equity $ 9,030 $ 8,300 Suppose the federal-plus-state tax corporate tax is 25%. Answer the following questions. What is the net operating profit after taxes (NOPAT) for 2020? Enter your answer in millions. For example, an answer of $1 million should be entered as 1, not 1,000,000. Round your answer to the nearest whole number. $   million What are the amounts of net operating working capital for both years? Enter your answers in millions. For example, an answer of $1 million should be entered as 1, not 1,000,000. Round your answers to the nearest whole number. 2020: $   million 2019: $   million What are the amounts of total net operating capital for both years? Enter your answers in millions. For example, an answer of $1 million should be entered as 1, not 1,000,000. Round your answers to the nearest whole number. 2020: $   million 2019: $   million What is the free cash flow for 2020? Enter your answer in millions. For example, an answer of $1 million should be entered as 1, not 1,000,000. Cash outflow, if any, should be indicated by a minus sign. Round your answer to the nearest whole number. $    million What is the ROIC for 2020? Round your answer to two decimal places.   % 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? (Hint: Remember that a net use can be negative.) Enter your answers in millions. For example, an answer of $1 million should be entered as 1, not 1,000,000. Round your answers to the nearest whole number. 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

Answer 1

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