Rhodes Corporation: Income Statements for Year Ending December 31 (Millions of D

Question

Rhodes Corporation: Income Statements for Year Ending December 31 (Millions of Dollars)

Rhodes Corporation: Balance Sheets as of December 31 (Millions of Dollars)

What is the ROIC for 2016? Round your answer to two decimal places.
%

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? (Hint: Remember that a net use can be negative.) Enter your answer in millions. For example, an answer of $1.2 million should be entered as 1.2, not 1,200,000. Round your answers to one decimal place.

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

2016 2015 Sales $2,500.0 $2,000.0 Operating costs excluding depreciation 2,000.0 1,700.0 Depreciation and amortization 68.0 54.0 Earnings before interest and taxes $432.0 $246.0   Less: Interest 54.0 43.0 Pre-tax income $378.0 $203.0   Taxes (40%) 151.2 81.2 Net income available to common stockholders $226.8 $121.8 Common dividends $204.0 $97.0

Explanation / Answer

2016 2015 2016 2015 After-tax interest payment $      32.40 54*(0.6) Sales $2,500.00 $2,000.00 Assets Reduction (increase) in debt $    110.00 550-440 Operating costs excluding depreciation $2,000.00 $1,700.00 Cash $35.00 $30.00 Payment of dividends $ 204.00 Depreciation and amortization $68.00 $54.00 Short-term investments $13.00 $10.00 Repurchase (Issue) stock $    135.20 618.20-483 Earnings before interest and taxes $432.00 $246.00 Accounts receivable $264.00 $220.00 Purchase (Sale) of short-term investments $     3.00 13-10   Less: Interest $54.00 $43.00 Inventories $546.00 $420.00 Pre-tax income $378.00 $203.00 Total current assets $858.00 $680.00   Taxes (40%) $151.20 $81.20 Net plant and equipment $675.00 $540.00 Net income available to common stockholders $226.80 $121.80 Total assets $1,533.00 $1,220.00 Common dividends $204.00 $97.00 Liabilities and Equity Accounts payable $161.00 $140.00 ROIC = (Net Income-Dividend)/Total Capital Accruals $144.00 $120.00 2.17% Notes payable $50.00 $40.00 Total capital Total current liabilities $355.00 $300.00 Notes payable $50.00 $40.00 Long-term bonds $500.00 $400.00 Long-term bonds $500.00 $400.00 Total liabilities $855.00 $700.00 Common stock $618.20 $483.00 Common stock $618.20 $483.00 Retained earnings $59.80 $37.00 Retained earnings $59.80 $37.00 Less: Total common equity $678.00 $520.00 Cash $35.00 $30.00 Total liabilities and equity $1,533.00 $1,220.00 Short-term investments $13.00 $10.00 Invested Capital $1,180.00 $920.00 Average Invested Capital $1,050.00

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