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?
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 | |
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 | |
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 | |||
— | — | ||
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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