Grand Canyon-FIN FIN-650-Using Rhodes Corporation’s financial statements

Rhodes Corporation: Income Statements for Year Ending December 31

(Millions of Dollars)

2013 2012

Sales $11,000 $10,000

Operating costs excluding depreciation 9,360 8,500

Depreciation and amortization 380 360

Earnings before interest and taxes $ 1,260 $ 1,140

Less interest 120 100

Pre-tax income $ 1,140 $ 1,040

Taxes (40%) 456 416

Net income available to common stockholders $ 684 $ 624

Common dividends $ 220 $ 200

Rhodes Corporation: Balance Sheets as of December 31 (Millions of Dollars)

2013 2012

Assets

Cash $ 550 $ 500

Short-term investments 110 100

Accounts receivable 2,750 2,500

Inventories 1,650 1,500

Total current assets $5,060 $4,600

Net plant and equipment 3,850 3,500

Total assets $8,910 $8,100

Liabilities and Equity

Accounts payable $1,100 $1,000

Accruals 550 500

Notes payable 384 200

Total current liabilities $2,034 $1,700

Long-term debt 1,100 1,000

Total liabilities $3,134 $2,700

Common stock 4,312 4,400

Retained earnings 1,464 1,000

Total common equity $5,776 $5,400

Total liabilities and equity $8,910 $8,100