Rhodes Corporation: Income Statements for Year Ending December 31
(Millions of Dollars)
2020 2019
Sales $ 11,000 $ 10,000
Operating costs excluding depreciation 9,618 8,730
Depreciation and amortization 370 330
Earnings before interest and taxes $ 1,012 $ 940
Less interest 280 200
Pre-tax income $ 732 $ 740
Taxes (25%) 183 185
Net income available to common stockholders $ 549 $ 555
Common dividends $ 204 $ 200
Rhodes Corporation: Balance Sheets as of December 31 (Millions of Dollars)
2020 2019
Assets
Cash $ 650 $ 600
Short-term investments 230 200
Accounts receivable 2,750 2,500
Inventories 1,250 1,200
Total current assets $ 4,880 $ 4,500
Net plant and equipment 3,750 3,500
Total assets $ 8,630 $ 8,000
Liabilities and Equity
Accounts payable $ 1,300 $ 1,200
Accruals 650 600
Notes payable 356 200
Total current liabilities $ 2,306 $ 2,000
Long-term debt 1,300 1,200
Total liabilities $ 3,606 3,200
Common stock 3,979 4,100
Retained earnings 1,045 700
Total common equity $ 5,024 $ 4,800
Total liabilities and equity $ 8,630 $ 8,000
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
Yu
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