In: Finance
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 | 9,550 | 8,718 | |||
Depreciation and amortization | 390 | 350 | |||
Earnings before interest and taxes | $ | 1,060 | $ | 932 | |
Less interest | 220 | 200 | |||
Pre-tax income | $ | 840 | $ | 732 | |
Taxes (25%) | 210 | 183 | |||
Net income available to common stockholders | $ | 630 | $ | 549 | |
Common dividends | $ | 203 | $ | 200 |
Rhodes Corporation: Balance Sheets as of December 31 (Millions of Dollars)
2020 | 2019 | ||||
Assets | |||||
Cash | $ | 450 | $ | 400 | |
Short-term investments | 110 | 100 | |||
Accounts receivable | 2,750 | 2,500 | |||
Inventories | 1,450 | 1,300 | |||
Total current assets | $ | 4,760 | $ | 4,300 | |
Net plant and equipment | 3,650 | 3,500 | |||
Total assets | $ | 8,410 | $ | 7,800 | |
Liabilities and Equity | |||||
Accounts payable | $ | 900 | $ | 800 | |
Accruals | 450 | 400 | |||
Notes payable | 380 | 200 | |||
Total current liabilities | $ | 1,730 | $ | 1,400 | |
Long-term debt | 900 | 800 | |||
Total liabilities | $ | 2,630 | 2,200 | ||
Common stock | 4,653 | 4,900 | |||
Retained earnings | 1,127 | 700 | |||
Total common equity | $ | 5,780 | $ | 5,600 | |
Total liabilities and equity | $ | 8,410 | $ | 7,800 |
Suppose the federal-plus-state tax corporate tax is 25%. Answer the following questions.
$ million
2020: $ million
2019: $ million
2020: $ million
2019: $ million
$ million
%
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 |