Free Cash Flows
Rhodes Corporation: Income Statements for Year EndingDecember 31 (Millions of Dollars)
| 2018 | | 2017 |
| Sales | $9,200.0 | | $8,000.0 |
| Operating costs excluding depreciation | 6,900.0 | | 6,800.0 |
| Depreciation and amortization | 246.0 | | 224.0 |
| Â Â Â Â Earnings before interest and taxes | $2,054.0 | | $976.0 |
| Less Interest | 198.0 | | 172.0 |
| Â Â Â Â Pre-tax income | $1,856.0 | | $804.0 |
| Taxes (40%) | 742.4 | | 321.6 |
| Net income available to common stockholders | $1,113.6 | | $482.4 |
| Common dividends | $1,002.0 | | $386.0 |
Rhodes Corporation: Balance Sheets as of December 31(Millions of Dollars)
| 2018 | | 2017 |
| Assets |
| Cash | $146.0 | | $112.0 |
| Short-term investments | 46.0 | | 40.0 |
| Accounts receivable | 1,196.0 | | 1,040.0 |
| Inventories | 1,496.0 | | 1,360.0 |
| Â Â Â Â Total current assets | $2,884.0 | | $2,552.0 |
| Net plant and equipment | 2,464.0 | | 2,240.0 |
| Total assets | $5,348.0 | | $4,792.0 |
| Liabilities and Equity |
| Accounts payable | $800.0 | | $640.0 |
| Accruals | 644.0 | | 560.0 |
| Notes payable | 184.0 | | 160.0 |
| Â Â Â Â Total current liabilities | $1,628.0 | | $1,360.0 |
| Long-term debt | 1,840.0 | | 1,600.0 |
| Â Â Â Â Total liabilities | $3,468.0 | | $2,960.0 |
| Common stock | 1,623.4 | | 1,687.0 |
| Retained earnings | 256.6 | | 145.0 |
| Â Â Â Â Total common equity | $1,880.0 | | $1,832.0 |
| Total liabilities and equity | $5,348.0 | | $4,792.0 |
- What are the amounts of total net operating capital for bothyears? Enter your answers in millions. For example, an answer of $1million should be entered as 1, not 1,000,000. Round your answersto the nearest whole number.
2018: $Â Â Â Â million
2017: $Â Â Â Â million
- What is the free cash flow for 2018? Enter your answer inmillions. For example, an answer of $1.2 million should be enteredas 1.2, not 1,200,000. Cash outflow, if any, should be indicated bya minus sign. Round your answer to one decimal place.
$Â Â Â million
- What is the ROIC for 2018? Round your answer to two decimalplaces.
%
- 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.
| Reduction (increase) in debt | $Â Â Â million |
| |
| Repurchase (Issue) stock | $Â Â Â Â million |
| |
