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From the following balance sheet and income statement:
- Compute the net profit after taxes for year 2018 and 2019. (2 Points)
- Compute the net operating working capital for years 2018 and 2019. (2 Points)
- Compute the total operating capital for years 2018 and 2019. (2 Points)
- Compute the free cash flow for year 2019. (2 Points)
- Compute the following ratios for 2019: (10 Points)
- Inventory Turnover
- Days Sales Outstanding
- Basic Earning Power
- Return of Equity
- Equity Multiplier
SEBRING CORPORATION: INCOME STATEMENTS FOR YEAR ENDING DECEMBER 31 (MILLIONS OF DOLLARS)
2019 2018
Sales $3,600.0 $3,000.0
Operating costs excluding depreciation 3,060.0 2,550.0
Depreciation 90.0 75.0
Earnings before interest and taxes $ 450.0 $ 375.0
Less interest 65.0 60.0
Earnings before taxes $ 385.0 $ 315.0
Taxes (40%) 154.0 126.0
Net income available to common stockholders $ 231.0 $ 189.0
Common dividends $ 181.5 $ 13.2
SEBRING CORPORATION: BALANCE SHEETS FOR YEAR ENDING DECEMBER 31
(MILLIONS OF DOLLARS)
2019 2018
Assets:
Cash and marketable securities $ 36.0 $ 30.0
Accounts receivable 540.0 450.0
Inventories 540.0 600.0
Total current assets $1,116.0 $1,080.0
Net plant and equipment 900.0 750.0
Total assets $2,016.0 $1,830.0
Liabilities and equity:
Accounts payable $ 324.0 $ 270.0
Notes payable 201.0 154.5
Accruals 216.0 180.0
Total current liabilities $ 741.0 $ 604.0
Long-term bonds 450.0 450.0
Total debt $1,191.0 $1,054.5
Common stock (50 million shares) 150.0 150.0
Retained earnings 675.0 625.0
Common equity $ 825.0 $ 775.0
Total liabilities and equity $2,016.0 $1,830.0
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