Problem: Using Rhodes Corporation's financial statements, answer the following questions.
1) What is the net operating profit after taxes (NOPAT) for 2010?
2) What are the amounts of net operating working capital for both years?
3) What are the amounts of total net operating capital for both years?
4) What is the free cash flow for 2010?
5) What is the ROIC for 2010?
6) 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 lie negative.)
|
Income Statement
|
2010
|
2009
|
|
Sales
|
11,000
|
10,000
|
|
Operating costs excluding depreciation
|
9,360
|
8,500
|
|
Depreciation
|
380
|
360
|
|
EBIT
|
1,260
|
1,140
|
|
Less interest
|
120
|
100
|
|
EBT
|
1,140
|
1,040
|
|
Taxes
|
456
|
416
|
|
Net Income
|
684
|
624
|
|
Common dividends
|
220
|
200
|
|
|
|
|
|
Balance Sheet
|
|
|
|
Assets
|
2010
|
2009
|
|
Cash
|
550
|
500
|
|
Short-term investments
|
110
|
100
|
|
Accounts receivable
|
2,750
|
2,500
|
|
Inventories
|
1,650
|
1,500
|
|
Total current assets
|
5,060
|
4,600
|
|
Net plant and equipment
|
3,850
|
3,500
|
|
Total assets
|
8,910
|
8,100
|
|
|
|
|
|
Liabilities and Equity
|
2010
|
2009
|
|
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 common equity
|
8,910
|
8,100
|