cecilia1964 Posts: 1, Reputation: 1 New Member   #1 Jan 25, 2012, 09:38 PM

A. Using the financial statements shown below, calculate net operating working capita 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 =

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