Given data: Sales $2,000.000 OpCap $1,120,000 Wacc 9% OP = Nopat/sales 4.5% CR = OpCap/sales 56% Year Rate growth (%) Sales Nopat OpCap Free Cash Flow (FCF) Free Cash Flow - Growth ROIC 0 - $2,000.000 $90.000 $1,120.000 - - - 1 0.10 $2,200.000 $99.000 $1,232.000 $(13.000) - 8.04% 2 0.08 $2,376.000 $106.920 $1,330.560 $8.360 -164.31% 8.04% 3 0.05 $2,494.800 $112.266 $1,397.088 $45.738 447.11% 8.04% 4 0.05 $2,619.540 $117.879 $1,466.942 $48.025 5.00% 8.04% Assume growth rates are at their original levels. What is the impact of simultaneous improvements in operating profitability and capital requirements, the impact of simultaneous improvements in the growth rates, operating profitability, and capital requirements?
Given data: Sales $2,000.000 OpCap $1,120,000 Wacc 9% OP = Nopat/sales 4.5% CR = OpCap/sales 56% Year Rate growth (%) Sales Nopat OpCap Free Cash Flow (FCF) Free Cash Flow - Growth ROIC 0 - $2,000.000 $90.000 $1,120.000 - - - 1 0.10 $2,200.000 $99.000 $1,232.000 $(13.000) - 8.04% 2 0.08 $2,376.000 $106.920 $1,330.560 $8.360 -164.31% 8.04% 3 0.05 $2,494.800 $112.266 $1,397.088 $45.738 447.11% 8.04% 4 0.05 $2,619.540 $117.879 $1,466.942 $48.025 5.00% 8.04% Assume growth rates are at their original levels. What is the impact of simultaneous improvements in operating profitability and capital requirements, the impact of simultaneous improvements in the growth rates, operating profitability, and capital requirements?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
| Given data: | |||||||
| Sales | $2,000.000 | ||||||
| OpCap | $1,120,000 | ||||||
| Wacc | 9% | ||||||
| OP = |
4.5% | ||||||
| CR = OpCap/sales | 56% | ||||||
| Year | Rate growth (%) | Sales | Nopat | OpCap | Free Cash Flow - Growth | ROIC | |
| 0 | - | $2,000.000 | $90.000 | $1,120.000 | - | - | - |
| 1 | 0.10 | $2,200.000 | $99.000 | $1,232.000 | $(13.000) | - | 8.04% |
| 2 | 0.08 | $2,376.000 | $106.920 | $1,330.560 | $8.360 | -164.31% | 8.04% |
| 3 | 0.05 | $2,494.800 | $112.266 | $1,397.088 | $45.738 | 447.11% | 8.04% |
| 4 | 0.05 | $2,619.540 | $117.879 | $1,466.942 | $48.025 | 5.00% | 8.04% |
Assume growth rates are at their original levels. What is the impact of simultaneous improvements in operating profitability and capital requirements, the impact of simultaneous improvements in the growth rates, operating profitability, and capital requirements?
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