Problem 2-12 Free Cash Flows Rhodes Corporation: Income Statements for Year Ending December 31 (Mill

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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 $6,000.0 Operating costs excluding depreciation 6,435.0 5,100.0 Depreciation and amortization 202.0 168.0 Earnings before interest and taxes $1,163.0 $732.0 Less Interest 168.0 129.0 Pre-tax income $995.0 $603.0 Taxes (40%) 398.0 241.2 Net income available to common stockholders $597.0 $361.8 Common dividends $537.0 $289.0 Rhodes Corporation: Balance Sheets as of December 31 (Millions of Dollars) 2016 2015 Assets Cash $79.0 $72.0 Short-term investments 39.0 30.0 Accounts receivable 720.0 600.0 Inventories 1,425.0 1,140.0 Total current assets $2,263.0 $1,842.0 Net plant and equipment 2,016.0 1,680.0 Total assets $4,279.0 $3,522.0 Liabilities and Equity Accounts payable $624.0 $480.0 Accruals 648.0 540.0 Notes payable 156.0 120.0 Total current liabilities $1,428.0 $1,140.0 Long-term debt 1,560.0 1,200.0 Total liabilities $2,988.0 $2,340.0 Common stock 1,122.0 1,073.0 Retained earnings 169.0 109.0 Total common equity $1,291.0 $1,182.0 Total liabilities and equity $4,279.0 $3,522.0 Using Rhodes Corporation's financial statements (shown above), answer the following questions. a- What is the net operating profit after taxes (NOPAT) for 2016? 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 answer to one decimal place. b- What are the amounts of net operating working capital for both years? 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. c-What are the amounts of total net operating capital for both years? 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. d- What is the free cash flow for 2016? 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 answer to one decimal place. e-What is the ROIC for 2016? Round your answer to two decimal places. 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? (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

 
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