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 2016? 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.
2016 $   million
2015 $   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.
2016 $   million
2015 $   million

What is the free cash flow for 2016? 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 2016? 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.

2016 2015 Sales $2,500.0 $2,000.0 Operating costs excluding depreciation 2,000.0 1,700.0 Depreciation and amortization 68.0 54.0 Earnings before interest and taxes $432.0 $246.0   Less: Interest 54.0 43.0 Pre-tax income $378.0 $203.0   Taxes (40%) 151.2 81.2 Net income available to common stockholders $226.8 $121.8 Common dividends $204.0 $97.0

Explanation / Answer

Answer:1 NOPAT = EBIT(1 – Tax Rate)

=$432*(1-0.40)

=$259.2

Answer:2 NOWC= Operating Current Assets-Operating Current Liabilities

NOWC = (Cash + Account Receivable + Inventories) – (Accounts Payable + Accruals)

2015=(30+220+420)-(140+120)

=410

2016=(35+264+546)-(161+144)

=540

Answer:3 Total Net Operating Capital = NOWC + Operating Long-Term Assets

2015=$410+540=$950

2016=$540+$675=1215

Answer:4 FCF = NOPAT – Net Investment in Operating Capital

2016=259.2-(1215-950)

=-5.8

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