cecilia1964
Jan 25, 2012, 09:38 PM
A. Using the financial statements shown below, calculate net operating working capita
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 =
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 =