Rhodes Corporation: Income Statements for Year Ending December 31 (Millions of Dollars) 2020 2019 Sales $ 12,000 $ 10,000 Operating costs excluding depreciation 10,634 8,702 Depreciation and amortization 410 390 Earnings before interest and taxes $ 956 $ 908 Less interest 260 200 Pre-tax income $ 696 $ 708 Taxes (25%) 174 177 Net income available to common stockholders $ 522 $ 531 Common dividends $ 203 $ 200 Rhodes Corporation: Balance Sheets as of December 31 (Millions of Dollars) 2020 2019 Assets Cash $ 550 $ 500 Short-term investments 220 200 Accounts receivable 2,750 2,500 Inventories 1,550 1,300 Total current assets $ 5,070 $ 4,500 Net plant and equipment 3,650 3,500 Total assets $ 8,720 $ 8,000 Liabilities and Equity Accounts payable $ 1,100 $ 1,000 Accruals 550 500 Notes payable 194 100 Total current liabilities $ 1,844 $ 1,600 Long-term debt 1,100 1,000 Total liabilities $ 2,944 2,600 Common stock 4,457 4,400 Retained earnings 1,319 1,000 Total common equity $ 5,776 $ 5,400 Total liabilities and equity $ 8,720 $ 8,000 Suppose the federal-plus-state tax corporate tax is 25%. Answer the following questions. What is the net operating profit after taxes (NOPAT) for 2020? Enter your answer in millions. For example, an answer of $1 million should be entered as 1, not 1,000,000. Round your answer to the nearest whole number. $ million What are the amounts of net operating working capital for both years? Enter your answers in millions. For example, an answer of $1 million should be entered as 1, not 1,000,000. Round your answers to the nearest whole number. 2020: $ million 2019: $ million What are the amounts of total net operating capital for both years? Enter your answers in millions. For example, an answer of $1 million should be entered as 1, not 1,000,000. Round your answers to the nearest whole number.
Rhodes Corporation: Income Statements for Year Ending December 31 (Millions of Dollars) 2020 2019 Sales $ 12,000 $ 10,000 Operating costs excluding depreciation 10,634 8,702 Depreciation and amortization 410 390 Earnings before interest and taxes $ 956 $ 908 Less interest 260 200 Pre-tax income $ 696 $ 708 Taxes (25%) 174 177 Net income available to common stockholders $ 522 $ 531 Common dividends $ 203 $ 200 Rhodes Corporation: Balance Sheets as of December 31 (Millions of Dollars) 2020 2019 Assets Cash $ 550 $ 500 Short-term investments 220 200 Accounts receivable 2,750 2,500 Inventories 1,550 1,300 Total current assets $ 5,070 $ 4,500 Net plant and equipment 3,650 3,500 Total assets $ 8,720 $ 8,000 Liabilities and Equity Accounts payable $ 1,100 $ 1,000 Accruals 550 500 Notes payable 194 100 Total current liabilities $ 1,844 $ 1,600 Long-term debt 1,100 1,000 Total liabilities $ 2,944 2,600 Common stock 4,457 4,400 Retained earnings 1,319 1,000 Total common equity $ 5,776 $ 5,400 Total liabilities and equity $ 8,720 $ 8,000 Suppose the federal-plus-state tax corporate tax is 25%. Answer the following questions. What is the net operating profit after taxes (NOPAT) for 2020? Enter your answer in millions. For example, an answer of $1 million should be entered as 1, not 1,000,000. Round your answer to the nearest whole number. $ million What are the amounts of net operating working capital for both years? Enter your answers in millions. For example, an answer of $1 million should be entered as 1, not 1,000,000. Round your answers to the nearest whole number. 2020: $ million 2019: $ million What are the amounts of total net operating capital for both years? Enter your answers in millions. For example, an answer of $1 million should be entered as 1, not 1,000,000. Round your answers to the nearest whole number.
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter9: Long-term Liabilities
Section: Chapter Questions
Problem 103.1C: Leverage Cook Corporation issued financial statements at December 31, 2019, that include the...
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Question
Rhodes Corporation: Income Statements for Year Ending December 31
(Millions of Dollars)
2020 | 2019 | ||||
Sales | $ | 12,000 | $ | 10,000 | |
Operating costs excluding |
10,634 | 8,702 | |||
Depreciation and amortization | 410 | 390 | |||
Earnings before interest and taxes | $ | 956 | $ | 908 | |
Less interest | 260 | 200 | |||
Pre-tax income | $ | 696 | $ | 708 | |
Taxes (25%) | 174 | 177 | |||
Net income available to common stockholders | $ | 522 | $ | 531 | |
Common dividends | $ | 203 | $ | 200 |
Rhodes Corporation: Balance Sheets as of December 31 (Millions of Dollars)
2020 | 2019 | ||||
Assets | |||||
Cash | $ | 550 | $ | 500 | |
Short-term investments | 220 | 200 | |||
2,750 | 2,500 | ||||
Inventories | 1,550 | 1,300 | |||
Total current assets | $ | 5,070 | $ | 4,500 | |
Net plant and equipment | 3,650 | 3,500 | |||
Total assets | $ | 8,720 | $ | 8,000 | |
Liabilities and Equity | |||||
Accounts payable | $ | 1,100 | $ | 1,000 | |
Accruals | 550 | 500 | |||
Notes payable | 194 | 100 | |||
Total current liabilities | $ | 1,844 | $ | 1,600 | |
Long-term debt | 1,100 | 1,000 | |||
Total liabilities | $ | 2,944 | 2,600 | ||
Common stock | 4,457 | 4,400 | |||
1,319 | 1,000 | ||||
Total common equity | $ | 5,776 | $ | 5,400 | |
Total liabilities and equity | $ | 8,720 | $ | 8,000 |
Suppose the federal-plus-state tax corporate tax is 25%. Answer the following questions.
- What is the
net operating profit after taxes (NOPAT) for 2020? Enter your answer in millions. For example, an answer of $1 million should be entered as 1, not 1,000,000. Round your answer to the nearest whole number.$ million
- What are the amounts of net operating
working capital for both years? Enter your answers in millions. For example, an answer of $1 million should be entered as 1, not 1,000,000. Round your answers to the nearest whole number.2020: $ million
2019: $ million
- What are the amounts of total net operating capital for both years? Enter your answers in millions. For example, an answer of $1 million should be entered as 1, not 1,000,000. Round your answers to the nearest whole number.
2020: $ million
2019: $ million
- What is the
free cash flow for 2020? Enter your answer in millions. For example, an answer of $1 million should be entered as 1, not 1,000,000.Cash outflow , if any, should be indicated by a minus sign. Round your answer to the nearest whole number.$ million
- What is the ROIC for 2020? 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 answers in millions. For example, an answer of $1 million should be entered as 1, not 1,000,000. Round your answers to the nearest whole number.
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
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