Rhodes Corporation: Income Statements for Year Ending December 31 (Millions of D

Question

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

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

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

What is the net operating profit after taxes (NOPAT) for 2015? Enter your answer in millions. For example, an answer of $1.2 million should be entered as 1.2, not 1,200,000. Round your answer to one decimal place.
$  .......... million

What are the amounts of net operating working capital for both years? Enter your answer in millions. For example, an answer of $1.2 million should be entered as 1.2, not 1,200,000. Round your answers to one decimal place.
2015 $  .......... million
2014 $ .......... million

What are the amounts of total net operating capital for both years? Enter your answer in millions. For example, an answer of $1.2 million should be entered as 1.2, not 1,200,000. Round your answers to one decimal place.
2015 $  .......... million
2014 $  .......... million

What is the free cash flow for 2015? Enter your answer in millions. For example, an answer of $1.2 million should be entered as 1.2, not 1,200,000. Round your answer to one decimal place.
$  .......... million

What is the ROIC for 2015? 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 answer in millions. For example, an answer of $1.2 million should be entered as 1.2, not 1,200,000. Round your answers to one decimal place.

2015 2014 Sales $7,800.0 $6,000.0 Operating costs excluding depreciation 6,045.0 5,100.0 Depreciation and amortization 173.0 138.0 Earnings before interest and taxes $1,582.0 $762.0   Less: Interest 168.0 129.0 Pre-tax income $1,414.0 $633.0   Taxes (40%) 565.6 253.2 Net income available to common stockholders $848.4 $379.8 Common dividends $764.0 $304.0 Rhades Cerponationi Income Statenerts for Year Ending December 31 tMiliens o Dalors) af Dollar 970 Lababe end Equity 5$2200 Total Esb es and equity uang Roc 0153 What or both yoirs houd bo um) stack

Explanation / Answer

1) EBIT = earnings before interest and tax = $1582

tax rate = 40% = 0.40

NOPAT = EBIT*(1-Tax rate) = 1582*(1-0.40) = $949.2 million

2)

for 2014

Net operating working capital = NOWC = Total current assets - total current liabilities = 2094-1080 = $1014 million

for 2015

Net operating working capital = NOWC = Total current assets - total current liabilities = 2521-1326 = $1195 million

3)

for 2014

total Net operating capital = NOC1 = NOWC for 2014 + Net plant & equipment(2014) = 1014 + 1380 = $2394 million

for 2015

total Net operating capital = NOC2 = NOWC for 2015 + Net plant & equipment(2015) = 1195 + 1725 = $2920 million

4)

Net investment = NOC2-NOC1 = 2920-2394 = 526

FCF = NOPAT - Net investment = 949.2 - 526 = $423.2 million

5) ROIC = NOPAT/Total Assets = 949.2/4246 = 0.223551578 or 22.3551578% or 22.36% ( rounding off to 2 decimal places)

here , Total assets = operating invested capital

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