The following is the Balance sheet for Kronos Corporation.
|
2015
|
2014
|
|
Assets
|
|
|
|
Cash
|
$102,850
|
$89,725
|
|
Accounts receivable
|
103,365
|
85,527
|
|
Inventories
|
38,444
|
34,982
|
|
Total current assets
|
$244,659
|
$210,234
|
|
Net fixed assets
|
67,165
|
42,436
|
|
Total assets
|
$311,824
|
$252,670
|
|
Liabilities and equity
|
|
|
|
Accounts payable
|
$30,761
|
$23,109
|
|
Accruals
|
30,477
|
22,656
|
|
Notes payable
|
16,717
|
14,217
|
|
Total current liabilities
|
$77,955
|
$59,982
|
|
Long-term debt
|
76,264
|
63,914
|
|
Total liabilities
|
$154,219
|
$123,896
|
|
Common stock
|
100,000
|
90,000
|
|
Retained earnings
|
57,605
|
38,774
|
|
Total common equity
|
$157,605
|
$128,774
|
|
Total liabilities and equity
|
$311,824
|
$252,670
|
a. Sales for 2015 were $455,150,000, and EBITDA was 15% of sales. Furthermore, depreciation and amortization were 11% of net fixed assets, interest was $8,575,000, the corporate tax rate was 40%, and Kronos pays 40% of its net income as dividends. Given this information, construct the firm's 2015 income statement.
b. Construct the statement of stockholders' equity for the year ending December 31, 2015, and the 2015 statement of cash flows.
c. Calculate 2014 and 2015 net operating working capital (NOWC) and 2015 free cash flow (FCF).
d. If Kronos increased its dividend payout ratio, what effect would this have on corporate taxes paid? What effect would this have on taxes paid by the company's shareholders?