Using the Campbell Soup files given below, develop NOPAT, OCF, and FCF for the last two years. In your opinion and using these measures, is the firm healthy or not? Why or why not? [Note: you will need to use the cash flow statement to find data for fixed asset and working capital investments. For fixed asset investment, consider only the “Purchases of plant assets” in your analysis from the cash flow statement. For working capital investment, only consider Depreciation and Amortization, accounts receivable, inventory, accounts payable, accruals from the cash flow statement. Remember that each of these cash flows already represent changes in cash flow period-over-period.] Please use supporting data exhibits.Consolidated Balance Sheets July 28, 2019 July 29, 2018Current assets Cash and cash equivalents $ 31 $ 49Accounts receivable, net574 563Inventories863 887Other current assets71 71Current assets of discontinued operations428 726Total current assets1,967 2,296Plant assets, net of depreciation2,455 2,466Goodwill4,017 3,864Other intangible assets, net of amortization3,415 3,664Other assets ($76 as of 2019 and $77 as of 2018 attributable to variable interest entity)127 189Noncurrent assets of discontinued operations1,167 2,050Total assets $ 13,148 $ 14,529Current liabilities Short-term borrowings $ 1,371 $ 1,525Payable to suppliers and others814 705Accrued liabilities609 516Dividends payable107 107Accrued income taxes15 10Current liabilities of discontinued operations469 731Total current liabilities3,385 3,594Long-term debt7,103 7,991Deferred taxes924 960Other liabilities559 547Noncurrent liabilities of discontinued operations65 64Total liabilities12,036 13,156Commitments and contingencies Campbell Soup Company shareholders' equity Preferred stock; authorized 40 shares; none issued— —Capital stock, $.0375 par value; authorized 560 shares; issued 323 shares12 12Additional paid-in capital372 349Earnings retained in the business1,993 2,224Capital stock in treasury, at cost(1,076) (1,103)Accumulated other comprehensive loss(198) (118)Total Campbell Soup Company shareholders' equity1,103 1,364Noncontrolling interests9 9Total equity1,112 1,373Total liabilities and equity $ 13,148 $ 14,529Consolidated Statements of Earnings 2019 2018 2017Net sales $ 8,107 $ 6,615 $ 5,837Costs and expenses Cost of products sold5,414 4,241 3,395Marketing and selling expenses842 728 675Administrative expenses610 563 448Research and development expenses91 91 93Other expenses / (income)140 (73) (216)Restructuring charges31 55 11Total costs and expenses7,128 5,605 4,406Earnings before interest and taxes979 1,010 1,431Interest expense356 183 115Interest income2 3 —Earnings before taxes625 830 1,316Taxes on earnings151 106 392Earnings from continuing operations474 724 924Loss from discontinued operations(263) (463) (37)Net earnings211 261 887Less: Net earnings (loss) attributable to noncontrolling interests— — —Net earnings attributable to Campbell Soup Company $ 211 $ 261 $ 887Per Share — Basic Earnings from continuing operations attributable to Campbell Soup Company $ 1.57 $ 2.41 $ 3.03Loss from discontinued operations(0.87) (1.54) (0.12)Net earnings attributable to Campbell Soup Company $ 0.70 $ 0.87 $ 2.91Weighted average shares outstanding — basic301 301 305Per Share — Assuming Dilution Earnings from continuing operations attributable to Campbell Soup Company $ 1.57 $ 2.40 $ 3.01Loss from discontinued operations(0.87) (1.53) (0.12)Net earnings attributable to Campbell Soup Company(1) $ 0.70 $ 0.86 $ 2.89Weighted average shares outstanding — assuming dilution302 302 307

NOPAT also known as Net Operating Profit after Taxes shows the revenue generated by a firm from its…

Answered: Using the Campbell Soup files given…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Question

Using the Campbell Soup files given below, develop NOPAT, OCF, and FCF for the last two years. In your opinion and using these measures, is the firm healthy or not? Why or why not? [Note: you will need to use the cash flow statement to find data for fixed asset and working capital investments. For fixed asset investment, consider only the “Purchases of plant assets” in your analysis from the cash flow statement. For working capital investment, only consider Depreciation and Amortization, accounts receivable, inventory, accounts payable, accruals from the cash flow statement. Remember that each of these cash flows already represent changes in cash flow period-over-period.] Please use supporting data exhibits.

Consolidated Balance Sheets



	July 28, 2019	July 29, 2018
Current assets
Cash and cash equivalents	$ 31	$ 49
Accounts receivable, net	574	563
Inventories	863	887
Other current assets	71	71
Current assets of discontinued operations	428	726
Total current assets	1,967	2,296
Plant assets, net of depreciation	2,455	2,466
Goodwill	4,017	3,864
Other intangible assets, net of amortization	3,415	3,664
Other assets ($76 as of 2019 and $77 as of 2018 attributable to variable interest entity)	127	189
Noncurrent assets of discontinued operations	1,167	2,050
Total assets	$ 13,148	$ 14,529
Current liabilities
Short-term borrowings	$ 1,371	$ 1,525
Payable to suppliers and others	814	705
Accrued liabilities	609	516
Dividends payable	107	107
Accrued income taxes	15	10
Current liabilities of discontinued operations	469	731
Total current liabilities	3,385	3,594
Long-term debt	7,103	7,991
Deferred taxes	924	960
Other liabilities	559	547
Noncurrent liabilities of discontinued operations	65	64
Total liabilities	12,036	13,156
Commitments and contingencies
Campbell Soup Company shareholders' equity
Preferred stock; authorized 40 shares; none issued	—	—
Capital stock, $.0375 par value; authorized 560 shares; issued 323 shares	12	12
Additional paid-in capital	372	349
Earnings retained in the business	1,993	2,224
Capital stock in treasury, at cost	(1,076)	(1,103)
Accumulated other comprehensive loss	(198)	(118)
Total Campbell Soup Company shareholders' equity	1,103	1,364
Noncontrolling interests	9	9
Total equity	1,112	1,373
Total liabilities and equity	$ 13,148	$ 14,529

Consolidated Statements of Earnings



	2019	2018	2017
Net sales	$ 8,107	$ 6,615	$ 5,837
Costs and expenses
Cost of products sold	5,414	4,241	3,395
Marketing and selling expenses	842	728	675
Administrative expenses	610	563	448
Research and development expenses	91	91	93
Other expenses / (income)	140	(73)	(216)
Restructuring charges	31	55	11
Total costs and expenses	7,128	5,605	4,406
Earnings before interest and taxes	979	1,010	1,431
Interest expense	356	183	115
Interest income	2	3	—
Earnings before taxes	625	830	1,316
Taxes on earnings	151	106	392
Earnings from continuing operations	474	724	924
Loss from discontinued operations	(263)	(463)	(37)
Net earnings	211	261	887
Less: Net earnings (loss) attributable to noncontrolling interests	—	—	—
Net earnings attributable to Campbell Soup Company	$ 211	$ 261	$ 887
Per Share — Basic
Earnings from continuing operations attributable to Campbell Soup Company	$ 1.57	$ 2.41	$ 3.03
Loss from discontinued operations	(0.87)	(1.54)	(0.12)
Net earnings attributable to Campbell Soup Company	$ 0.70	$ 0.87	$ 2.91
Weighted average shares outstanding — basic	301	301	305
Per Share — Assuming Dilution
Earnings from continuing operations attributable to Campbell Soup Company	$ 1.57	$ 2.40	$ 3.01
Loss from discontinued operations	(0.87)	(1.53)	(0.12)
Net earnings attributable to Campbell Soup Company(1)	$ 0.70	$ 0.86	$ 2.89
Weighted average shares outstanding — assuming dilution	302	302	307

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