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a. Using the financial statements shown below, cal...

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a. Using the financial statements shown below, calculate net operating working capital, total net operating capital, net operating profit after taxes, free cash flow, and return on invested capital for the most recent year. Lan & Chen Technologies: Income Statements for Year Ending December 31 (Thousands of Dollars) 2010 2009 Sales $945,000 $900,000 Expenses excluding depreciation and amortization 812,700 774,000 EBITDA $132,300 $126,000 Depreciation and amortization 33,100 31,500 EBIT $99,200 $94,500 Interest Expense 10,470 8,600 EBT $88,730 $85,900 Taxes (40%) 35,492 34,360 Net income $53,238 $51,540 Common dividends $43,300 $41,230 Addition to retained earnings $9,938 $10,310 Lan & Chen Technologies: December 31 Balance Sheets (Thousands of Dollars) Assets 2010 2009 Cash and cash equivalents $47,250 $45,000 Short-term investments 3,800 3,600 Accounts Receivable 283,500 270,000 Inventories 141,750 135,000 Total current assets $476,300 $453,600 Net fixed assets 330,750 315,000 Total assets $807,050 $768,600 Liabilities and equity Accounts payable $94,500 $90,000 Accruals 47,250 45,000 Notes payable 26,262 9,000 Total current liabilities $168,012 $144,000 Long-term debt 94,500 90,000 Total liabilities $262,512 $234,000 Common stock 444,600 444,600 Retained Earnings 99,938 90,000 Total common equity $544,538 $534,600 Total liabilities and equity $807,050 $768,600 Key Input Data Tax rate 40% Net operating working capital 2010 NOWC = Operating current assets - Operating current liabilities 2010 NOWC = - 2010 NOWC = 2009 NOWC = Operating current assets - Operating current liabilities 2009 NOWC = - 2009 NOWC = Total net operating capital 2010 TOC = NOWC + Fixed assets 2010 TOC = + 2010 TOC = 2009 TOC = NOWC + Fixed assets 2009 TOC = + 2009 TOC = Investment in total net operating capital 2010 2009 2010 Inv. In TOC = TOC - TOC 2010 Inv. In TOC = - 2010 Inv. In TOC = Net operating profit after taxes 2010 NOPAT = EBIT x ( 1 - T ) 2010 NOPAT = x 2010 NOPAT = Free cash flow 2010 FCF = NOPAT - Net investment in operating capital 2010 FCF = - 2010 FCF = Return on invested capital 2010 ROIC = NOPAT / Total net operating capital 2010 ROIC = / 2010 ROIC = b. Assume that there were 15 million shares outstanding at the end of the year, the year-end closing stock price was $65 per share, and the after-tax cost of capital was 8%. Calculate EVA and MVA for the most recent year. Additional Input Data Stock price per share $65.00 # of shares (in thousands) 15,000 After-tax cost of capital 8.0% Market Value Added MVA = Stock price x # of shares - Total common equity MVA = x - MVA = - MVA = Economic Value Added EVA = NOPAT - (Operating Capital x After-tax cost of capital) EVA = - x EVA = - EVA =,Hi Rachael, Thank you for the answers. I am trying to understand how to get the values and cannot. When I Press F2 to see the Computation how to derived the value, nothing happens. I have 2007 excel. Any suggestions?

 

Paper#5552 | Written in 18-Jul-2015

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