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From the following balance sheet and income statement:

1. Compute the net profit after taxes for year 2018 and 2019. (2 Points)
2. Compute the net operating working capital for years 2018 and 2019. (2 Points)
3. Compute the total operating capital for years 2018 and 2019. (2 Points)
4. Compute the free cash flow for year 2019. (2 Points)
5. Compute the following ratios for 2019: (10 Points)
   1. Inventory Turnover
   2. Days Sales Outstanding
   3. Basic Earning Power
   4. Return of Equity
   5. Equity Multiplier

SEBRING CORPORATION: INCOME STATEMENTS FOR YEAR ENDING DECEMBER 31 (MILLIONS OF DOLLARS)

2019 2018

Sales $3,600.0 $3,000.0

Operating costs excluding depreciation 3,060.0 2,550.0

Depreciation 90.0 75.0

Earnings before interest and taxes $ 450.0 $ 375.0

Less interest 65.0 60.0

Earnings before taxes $ 385.0 $ 315.0

Taxes (40%) 154.0 126.0

Net income available to common stockholders $ 231.0 $ 189.0

Common dividends $ 181.5 $ 13.2

SEBRING CORPORATION: BALANCE SHEETS FOR YEAR ENDING DECEMBER 31

(MILLIONS OF DOLLARS)

2019 2018

Assets:

Cash and marketable securities $ 36.0 $ 30.0

Accounts receivable 540.0 450.0

Inventories 540.0 600.0

Total current assets $1,116.0 $1,080.0

Net plant and equipment 900.0 750.0

Total assets $2,016.0 $1,830.0

Liabilities and equity:

Accounts payable $ 324.0 $ 270.0

Notes payable 201.0 154.5

Accruals 216.0 180.0

Total current liabilities $ 741.0 $ 604.0

Long-term bonds 450.0 450.0

Total debt $1,191.0 $1,054.5

Common stock (50 million shares) 150.0 150.0

Retained earnings 675.0 625.0

Common equity $ 825.0 $ 775.0

Total liabilities and equity $2,016.0 $1,830.0

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