Using Rhodes Corporation%u2019s financial statements (shown below), answer the f
ID: 2700936 • Letter: U
Question
Using Rhodes Corporation%u2019s financial statements (shown below), answer the following questions.
a. What is the net operating profit after taxes (NOPAT) for 2012?
b. What are the amounts of net operating working capital for both years?
c. What are the amounts of total net operating capital for both years?
d. What is the FCF for 2012?
e. What is the ROIC for 2012?
f. 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? (Remember that a net use can be negative)
Rhodes Corporation: Income Statement for Year Ending December 31 (Millions of Dollars)
2012 2011
Sales $11,000 $10,000
Operating costs excluding depreciation 9,360 8,500
Depreciation and amortization 380 360
Earnings before interest and taxes $1,260 $1,140
Less interest 120 100
Earnings before taxes $1,140 $1,040
Taxes (40%) 456 416
Net income available to common shareholders 684 624
Common dividends $220 $200
Rhodes Corporation: Balance Sheet as of December 31 (Millions of Dollars)
2012 2011
Assets $550 $500
Cash 110 100
Short term investments 2,750 2,500
Accounts receivable 1,650 1,500
Inventories $5,060 $4,600
Total current assets 3,850 3,500
Total assets $8,910 $8,100
2012 2011
Liabilities and Equity
Accounts payable $1,100 $1,000
Accruals 550 500
Notes payable 384 200
Total current liabilities $2,034 $1,700
Long-term debt 1,100 1,000
Total liabilities $3,134 $2,700
Common stock 4,312 4,400
Retained earnings 1,464 1,000
Total common equity $5,776 $5,400
Total liabilities and equity $8,910 $8,100
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