012         $    940 Less interest        280             200     Pre-tax income    $    732         $    740 Taxes (25%)        183             185

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Rhodes Corporation: Income Statements for Year Ending December 31
(Millions of Dollars)

     2020         2019
Sales    $    11,000         $    10,000
Operating costs excluding depreciation        9,618             8,730
Depreciation and amortization        370             330
    Earnings before interest and taxes    $    1,012         $    940
Less interest        280             200
    Pre-tax income    $    732         $    740
Taxes (25%)        183             185
Net income available to common stockholders    $    549         $    555
Common dividends    $    204         $    200
Rhodes Corporation: Balance Sheets as of December 31 (Millions of Dollars)

     2020         2019
Assets
Cash    $    650         $    600
Short-term investments        230             200
Accounts receivable        2,750             2,500
Inventories        1,250             1,200
    Total current assets    $    4,880         $    4,500
Net plant and equipment        3,750             3,500
Total assets    $    8,630         $    8,000
 
Liabilities and Equity
Accounts payable    $    1,300         $    1,200
Accruals        650             600
Notes payable        356             200
    Total current liabilities    $    2,306         $    2,000
Long-term debt        1,300             1,200
    Total liabilities    $    3,606             3,200
Common stock        3,979             4,100
Retained earnings        1,045             700
    Total common equity    $    5,024         $    4,800
Total liabilities and equity    $    8,630         $    8,000
Suppose the federal-plus-state tax corporate tax is 25%. Answer the following questions.

What is the net operating profit after taxes (NOPAT) for 2020? Enter your answer in millions. For example, an answer of $1 million should be entered as 1, not 1,000,000. Round your answer to the nearest whole number.
$  
 million

What are the amounts of net operating working capital for both years? Enter your answers in millions. For example, an answer of $1 million should be entered as 1, not 1,000,000. Round your answers to the nearest whole number.
2020: $  
 million

2019: $  
 million

What are the amounts of total net operating capital for both years? Enter your answers in millions. For example, an answer of $1 million should be entered as 1, not 1,000,000. Round your answers to the nearest whole number.
2020: $  
 million

2019: $  
 million
Yu
What is the free cash flow for 2020? Enter your answer in millions. For example, an answer of $1 million should be entered as 1, not 1,000,000. Cash outflow, if any, should be indicated by a minus sign. Round your answer to the nearest whole number.
$  
  million

What is the ROIC for 2020? 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 answers in millions. For example, an answer of $1 million should be entered as 1, not 1,000,000. Round your answers to the nearest whole number.
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

 

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