Free Cash Flows Rhodes Corporation: Income Statements for Year Ending December 31 (Millions of Dollars) 2016 2015 Sales $6,900.0 $6,000.0 Operating costs excluding...

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Finance

Free Cash Flows

Rhodes Corporation: Income Statements for Year EndingDecember 31 (Millions of Dollars)

20162015
Sales$6,900.0$6,000.0
Operating costs excluding depreciation5,175.05,100.0
Depreciation and amortization151.0126.0
    Earnings before interest and taxes$1,574.0$774.0
Less Interest148.0129.0
    Pre-tax income$1,426.0$645.0
Taxes (40%)570.4258.0
Net income available to common stockholders$855.6$387.0
Common dividends$770.0$310.0

Rhodes Corporation: Balance Sheets as of December 31(Millions of Dollars)

20162015
Assets
Cash$72.0$60.0
Short-term investments35.030.0
Accounts receivable1,050.0840.0
Inventories1,518.01,380.0
    Total current assets$2,675.0$2,310.0
Net plant and equipment1,512.01,260.0
Total assets$4,187.0$3,570.0
Liabilities and Equity
Accounts payable$414.0$360.0
Accruals621.0540.0
Notes payable138.0120.0
    Total current liabilities$1,173.0$1,020.0
Long-term debt1,380.01,200.0
    Total liabilities$2,553.0$2,220.0
Common stock1,432.41,234.0
Retained earnings201.6116.0
    Total common equity$1,634.0$1,350.0
Total liabilities and equity$4,187.0$3,570.0

Using Rhodes Corporation's financial statements (shown above),answer the following questions.

  1. What is the net operating profit after taxes (NOPAT) for 2016?Enter your answer in millions. For example, an answer of $1.2million should be entered as 1.2, not 1,200,000. Round your answerto one decimal place.
    $   million
  2. What are the amounts of net operating working capital for bothyears? Enter your answer in millions. For example, an answer of$1.2 million should be entered as 1.2, not 1,200,000. Round youranswers to one decimal place.
    2016 $   million
    2015 $   million
  3. What are the amounts of total net operating capital for bothyears? Enter your answer in millions. For example, an answer of$1.2 million should be entered as 1.2, not 1,200,000. Round youranswers to one decimal place.
    2016 $   million
    2015 $   million
  4. What is the free cash flow for 2016? Enter your answer inmillions. For example, an answer of $1.2 million should be enteredas 1.2, not 1,200,000. Round your answer to one decimalplace.
    $   million
  5. What is the ROIC for 2016? Round your answer to two decimalplaces.
    %
  6. How much of the FCF did Rhodes use for each of the followingpurposes: after-tax interest, net debt repayments, dividends, netstock repurchases, and net purchases of short-term investments?(Hint: Remember that a net use can be negative.) Enteryour answer in millions. For example, an answer of $1.2 millionshould be entered as 1.2, not 1,200,000. Round your answers to onedecimal place.
    After-tax interest payment$   million
    Reduction (increase) in debt$   million
    Payment of dividends$   million
    Repurchase (Issue) stock$   million
    Purchase (Sale) of short-term investments$   million

Answer & Explanation Solved by verified expert
3.6 Ratings (545 Votes)
All financials are in million Part a NOPAT for 2016 EBIT x 1 T 157400 x 1 40 9444 million Part b NOWC Cash Accounts Receivable Inventories Account Payable Accruals NOWC for 2016 7200 105000 151800 41400 621 16050    See Answer
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