Rhodes Corporation: Income Statements for Year Ending December 31 (Millions of Dollars)
2016 | 2015 | ||
Sales | $9,775.0 | $8,500.0 | |
Operating costs excluding depreciation | 8,309.0 | 7,225.0 | |
Depreciation and amortization | 287.0 | 221.0 | |
Earnings before interest and taxes | $1,179.0 | $1,054.0 | |
Less Interest | 210.0 | 183.0 | |
Pre-tax income | $969.0 | $871.0 | |
Taxes (40%) | 387.6 | 348.4 | |
Net income available to common stockholders | $581.4 | $522.6 | |
Common dividends | $523.0 | $418.0 |
Rhodes Corporation: Balance Sheets as of December 31 (Millions of Dollars)
2016 | 2015 | ||
Assets | |||
Cash | $122.0 | $102.0 | |
Short-term investments | 49.0 | 43.0 | |
Accounts receivable | 1,326.0 | 1,105.0 | |
Inventories | 1,466.0 | 1,275.0 | |
Total current assets | $2,963.0 | $2,525.0 | |
Net plant and equipment | 2,873.0 | 2,210.0 | |
Total assets | $5,836.0 | $4,735.0 | |
Liabilities and Equity | |||
Accounts payable | $850.0 | $680.0 | |
Accruals | 850.0 | 680.0 | |
Notes payable | 196.0 | 170.0 | |
Total current liabilities | $1,896.0 | $1,530.0 | |
Long-term debt | 1,955.0 | 1,700.0 | |
Total liabilities | $3,851.0 | $3,230.0 | |
Common stock | 1,769.6 | 1,348.0 | |
Retained earnings | 215.4 | 157.0 | |
Total common equity | $1,985.0 | $1,505.0 | |
Total liabilities and equity | $5,836.0 | $4,735.0 |
Using Rhodes Corporation's financial statements (shown above), answer the following questions.
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 |
I am solving 4 subparts
a)NOPAT=EBIT*(1-tax)
for 2016=1179*(1-40%)
=707.40
b)Net operating working capital=(Cash+inventory+acc
rec)-(accrual+account payable)
2016=(122+1466+1326)-(850+850)=1214
2015=(102+1275+1105)-(680+680)=1122
c)Total Net operating working capital=Net operating working
capital+net fixed assets
2016=1214+2873=4087
2015=1122+2210=3332
d)Free cash flow in 2016=OCF-Change in NOWC-capex
OCF=EBIT*(1-tax)+Dep
=(1179*(1-40%))+287=994.40
Change in NOWC=1214-1122=92
Capex=2873-2210=663
free cash flow=994.40-92-663
=239.4
Rhodes Corporation: Income Statements for Year Ending December 31 (Millions of Dollars) 2016 2015 Sales $9,775.0...
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Rhodes Corporation: Income Statements for Year Ending December 31 (Millions of Dollars) 2016 2015 Sales $1,100.0 $1,000.0 Operating costs excluding depreciation 908.0 850.0 Depreciation and amortization 25.0 21.0 Earnings before interest and taxes $167.0 $129.0 Less Interest 24.0 Pre-tax income $143.0 $107.0 Taxes (40%) 57.2 42.8 Net income available to common stockholders $85.8 $64.2 Common dividends $77.0 $51.0 22.0 Rhodes Corporation: Balance Sheets as of December 31 (Millions of Dollars) 2016 2015 Assets Cash $14.0 $11.0 Short-term investments 6.0 5.0...
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Problem 2-12 Free Cash Flows Rhodes Corporation: Income Statements for Year Ending December 31 (Millions of Dollars) 2016 2015 Sales $7,800.0 $6,500.0 Operating costs excluding depreciation 6,630.0 5,525.0 Depreciation and amortization 226.0 189.0 Earnings before interest and taxes $944.0 $786.0 Less Interest 168.0 140.0 Pre-tax income $776.0 $646.0 Taxes (40%) 310.4 258.4 Net income available to common stockholders $465.6 $387.6 Common dividends $419.0 $310.0 Rhodes Corporation: Balance Sheets as of December 31 (Millions of Dollars) 2016 2015 Assets Cash $118.0...
Rhodes Corporation: Income Statements for Year Ending December 31 (Millions of Dollars) 2017 Sales Operating costs excluding depreciation Depreciation and amortization Earnings before interest and taxes Less Interest Pre-tax income Taxes (40%) Net income available to common stockholders Common dividends 2018 $11,050.0 8,564.0 275.0 $2,211.0 238.0 $1,973.0 789.2 $1,183.8 $1,065.0 $8,500.0 7,225.0 230.0 $1,045.0 183.0 $862.0 344.8 $517.2 $414.0 Rhodes Corporation: Balance Sheets as of December 31 (Millions of Dollars) 2018 2017 $112.0 56.0 1,169.0 2,656.0 $3,993.0 2,754.0 $6,747.0 $102.0...
164.0 Free Cash Flows Rhodes Corporation: Income Statements for Year Ending December 31 (Millions of Dollars) 2016 2015 Sales $9,350.0 $8,500.0 Operating costs excluding depreciation 7,013.0 7,225.0 Depreciation and amortization 196.0 179.0 Earnings before interest and taxes $2,141.0 $1,096.0 Less Interest 201.0 183.0 Pre-tax income $1,940.0 $913.0 Taxes (40%) 776.0 365.2 Net income available to common stockholders $1,164.0 $547.8 Common dividends $1,048.0 $438.0 Rhodes Corporation: Balance Sheets as of December 31 (Millions of Dollars) 2016 2015 Assets Cash $113.0 $94.0...
Rhodes Corporation: Income Statements for Year Ending December 31 (Millions of Dollars) Sales Operating costs excluding depreciation Depreciation and amortization Earnings before interest and taxes Less Interest Pre-tax income Taxes (40%) Net income available to common stockholders Common dividends 2018 $11,050.0 8,564.0 275.0 $2,211.0 238.0 $1,973.0 789.2 $1,183.8 $1,065.0 2017 $8,500.0 7,225.0 230.0 $1,045.0 183.0 $862.0 344.8 $517.2 $414.0 Rhodes Corporation: Balance Sheets as of December 31 (Millions of Dollars) 2018 2017 $112.0 56.0 1,169.0 2,656.0 $3,993.0 2,754.0 $6,747.0 $102.0...
Using Rhodes Corporation's financial statements (shown above),
answer the following questions.
Rhodes Corporation: Income Statements for Year Ending December 31 (Millions of Dollars) 2016 2015 $8,450.0$6,500.0 5,525.0 163.0 $812.0 140.0 $672.0 268.8 $403.2 $323.0 Sales Operating costs excluding depreciation Depreciation and amortization 6,760.0 195.0 $1,495.0 182.0 $1,313.0 525.2 $787.8 $709.0 Earnings before interest and taxes Less Interest Pre-tax income Taxes (40%) Net income available to common stockholders Common dividends Rhodes Corporation: Balance Sheets as of December 31 (Millions of Dollars)...
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