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In: Accounting

Arlington Corporation's financial statements (dollars and shares are in millions) are provided here. Balance Sheets as...

Arlington Corporation's financial statements (dollars and shares are in millions) are provided here.

Balance Sheets as of December 31
2018 2017
Assets
Cash and equivalents $  15,000 $  11,000
Accounts receivable 30,000 25,000
Inventories 28,295 23,000
  Total current assets $ 73,295 $ 59,000
Net plant and equipment 47,000 46,000
Total assets $120,295 $105,000
Liabilities and Equity
Accounts payable $ 10,800 $  9,500
Accruals 7,000 5,000
Notes payable 6,000 5,150
  Total current liabilities $ 23,800 $ 19,650
Long-term bonds 15,000 15,000
  Total liabilities $ 38,800 $ 34,650
Common stock (4,000 shares) 50,000 50,000
Retained earnings 31,495 20,350
  Common equity $ 81,495 $ 70,350
Total liabilities and equity $120,295 $105,000
Income Statement for Year Ending December 31, 2018
Sales $206,000
Operating costs excluding depreciation and amortization 160,000
EBITDA $ 46,000
Depreciation & amortization 6,000
EBIT $ 40,000
Interest 2,750
EBT $ 37,250
Taxes (40%) 14,900
Net income $ 22,350
Dividends paid 11,205

Enter your answers in millions. For example, an answer of $25,000,000,000 should be entered as 25,000. Round your answers to the nearest whole number, if necessary.

  1. What was net operating working capital for 2017 and 2018? Assume that all cash is excess cash; i.e., this cash is not needed for operating purposes.
    2017 $    million
    2018 $    million

  2. What was Arlington's 2018 free cash flow?

    $    million
  3. Construct Arlington's 2018 statement of stockholders' equity.
    Statement of Stockholders' Equity, 2018
    Common Stock Retained
    Earnings
    Total Stockholders'
    Equity
    Shares Amount
    Balances, 12/31/17   million $    million $    million $    million
    2018 Net Income   million
    Cash Dividends   million
    Addition to retained earnings   million
    Balances, 12/31/18   million $    million $    million $    million
  4. What was Arlington's 2018 EVA? Assume that its after-tax cost of capital is 10%. Round your answer to two decimal places.

    $    million

  5. What was Arlington's MVA at year-end 2018? Assume that its stock price at December 31, 2018 was $25. Round your answer to two decimal places.

    $    million

Solutions

Expert Solution

according to guidelines i have solved 4 parts. Please rate Accordingly. If any doubt please ask.


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