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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

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Build a ModelSolution 7/16/15Chapter: 2Problem: 15a. 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) 2016 2015Sales $945,000 $900,000Expenses excluding depreciation and amortization 812,700 774,000EBITDA $132,300 $126,000Depreciation and amortization 33,100 31,500EBIT $99,200 $94,500Interest Expense 10,470 8,600EBT $88,730 $85,900Taxes (40%) 35,492 34,360Net income $53,238 $51,540Common dividends $43,300 $41,230Addition to retained earnings $9,938 $10,310Lan & Chen Technologies: December 31 Balance Sheets(Thousands of Dollars)Assets 2016 2015Cash and cash equivalents $47,250 $45,000Short-term investments 3,800 3,600Accounts Receivable 283,500 270,000Inventories 141,750 135,000Total current assets $476,300 $453,600Net fixed assets 330,750 315,000Total assets $807,050 $768,600Liabilities and equityAccounts payable $94,500 $90,000Accruals 47,250 45,000Notes payable 26,262 9,000Total current liabilities $168,012 $144,000Long-term debt 94,500 90,000Total liabilities $262,512 $234,000Common stock 444,600 444,600Retained Earnings 99,938 90,000Total common equity $544,538 $534,600Total liabilities and equity $807,050 $768,600Key Input DataTax rate 40%Net operating working capital2016 NOWC = Operating current assets – Operating current liabilities2016 NOWC =Kenneth D. Jackson: Short-Term Investments are not part of current operating assets –Kenneth D. Jackson: Notes Payable are not part of current operating liabilities 2016 NOWC =2015 NOWC = Operating current assets – Operating current liabilities2015 NOWC = –2015 NOWC =Total net operating capital2016 TOC = NOWC + Fixed assets2016 TOC = +2016 TOC =2015 TOC = NOWC + Fixed assets2015 TOC = +2015 TOC =Investment in total net operating capital2016 20152016 Inv. In TOC = TOC – TOC2016 Inv. In TOC = –2016 Inv. In TOC =Net operating profit after taxes2016 NOPAT = EBIT x ( 1 – T )2016 NOPAT = x2016 NOPAT =Free cash flow2016 FCF = NOPAT – Net investment in operating capital2016 FCF = –Michael C. Ehrhardt: Change in total net operating capital (TOC) from the previous year to the current year. 2016 FCF =Return on invested capital2016 ROIC = NOPAT / Total net operating capital2016 ROIC = /2016 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 DataStock price per share $65.00After-tax cost of capital 8.0%Market Value AddedMVA = Stock price x # of shares – Total common equityMVA = x –MVA = –MVA =Economic Value AddedEVA = NOPAT – (Operating Capital x After-tax cost of capital)EVA = – xEVA = –EVA =”Do you need a similar assignment done for you from scratch? We have qualified writers to help you with a guaranteed plagiarism-free A+ quality paper.

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