Financial information for Powell Panther Corporation is shown below: Powell Panther Corporation: Income Statements for Year Ending December 31 (millions of dollars) 2021 2020 Sales $ 2,500.0 $ 2,000.0 Operating costs excluding depreciation and amortization 1,938.0 1,700.0 EBITDA $ 562.0 $ 300.0 Depreciation and amortization 62.0 54.0 Earnings before interest and taxes (EBIT) $ 500.0 $ 246.0 Interest 55.0 44.0 Earnings before taxes (EBT) $ 445.0 $ 202.0 Taxes (25%) 178.0 80.8 Net income $ 267.0 $ 121.2 Common dividends $ 240.3 $ 97.0 Powell Panther Corporation: Balance Sheets as of December 31 (millions of dollars) 2021 2020 Assets Cash and equivalents $ 36.0 $ 30.0 Accounts receivable 375.0 300.0 Inventories 468.0 360.0 Total current assets $ 879.0 $ 690.0 Net plant and equipment 621.0 540.0 Total assets $ 1,500.0 $ 1,230.0 Liabilities and Equity Accounts payable $ 250.0 $ 200.0 Accruals 75.0 60.0 Notes payable 50.0 40.0 Total current liabilities $ 375.0 $ 300.0 Long-term bonds 500.0 400.0 Total liabilities $ 875.0 $ 700.0 Common stock 562.0 493.7 Retained earnings 63.0 36.3 Common equity $ 625.0 $ 530.0 Total liabilities and equity $ 1,500.0 $ 1,230.0 Write out your answers completely. For example, 25 million should be entered as 25,000,000. Round your answers to the nearest dollar, if necessary. Negative values, if any, should be indicated by a minus sign. What was net operating working capital for 2020 and 2021? Assume the firm has no excess cash. 2020: $ 2021: $ What was the 2021 free cash flow? $ How would you explain the large increase in 2021 dividends? The large increase in net income from 2020 to 2021 explains the large increase in 2021 dividends. The large increase in free cash flow from 2020 to 2021 explains the large increase in 2021 dividends. The large increase in EBIT from 2020 to 2021 explains the large increase in 2021 dividends. The large increase in sales from 2020 to 2021 explains the large increase in 2021 dividends. The large increase in retained earnings from 2020 to 2021 explains the large increase in 2021 dividends.

Financial information for Powell Panther Corporation is shown below: Powell Panther Corporation: Income Statements for Year Ending December 31 (millions of dollars) 2021 2020 Sales $ 2,500.0 $ 2,000.0 Operating costs excluding depreciation and amortization 1,938.0 1,700.0 EBITDA $ 562.0 $ 300.0 Depreciation and amortization 62.0 54.0 Earnings before interest and taxes (EBIT) $ 500.0 $ 246.0 Interest 55.0 44.0 Earnings before taxes (EBT) $ 445.0 $ 202.0 Taxes (25%) 178.0 80.8 Net income $ 267.0 $ 121.2 Common dividends $ 240.3 $ 97.0 Powell Panther Corporation: Balance Sheets as of December 31 (millions of dollars) 2021 2020 Assets Cash and equivalents $ 36.0 $ 30.0 Accounts receivable 375.0 300.0 Inventories 468.0 360.0 Total current assets $ 879.0 $ 690.0 Net plant and equipment 621.0 540.0 Total assets $ 1,500.0 $ 1,230.0 Liabilities and Equity Accounts payable $ 250.0 $ 200.0 Accruals 75.0 60.0 Notes payable 50.0 40.0 Total current liabilities $ 375.0 $ 300.0 Long-term bonds 500.0 400.0 Total liabilities $ 875.0 $ 700.0 Common stock 562.0 493.7 Retained earnings 63.0 36.3 Common equity $ 625.0 $ 530.0 Total liabilities and equity $ 1,500.0 $ 1,230.0 Write out your answers completely. For example, 25 million should be entered as 25,000,000. Round your answers to the nearest dollar, if necessary. Negative values, if any, should be indicated by a minus sign. What was net operating working capital for 2020 and 2021? Assume the firm has no excess cash. 2020: $ 2021: $ What was the 2021 free cash flow? $ How would you explain the large increase in 2021 dividends? The large increase in net income from 2020 to 2021 explains the large increase in 2021 dividends. The large increase in free cash flow from 2020 to 2021 explains the large increase in 2021 dividends. The large increase in EBIT from 2020 to 2021 explains the large increase in 2021 dividends. The large increase in sales from 2020 to 2021 explains the large increase in 2021 dividends. The large increase in retained earnings from 2020 to 2021 explains the large increase in 2021 dividends.

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter17: Corporations: Introduction And Operating Rules

Section: Chapter Questions

Problem 47P

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Question

Financial information for Powell Panther Corporation is shown below:

Powell Panther Corporation: Income Statements for Year Ending December 31 (millions of dollars)

	2021	2020
Sales	$	2,500.0	$	2,000.0
Operating costs excluding depreciation and amortization		1,938.0		1,700.0
EBITDA	$	562.0	$	300.0
Depreciation and amortization		62.0		54.0
Earnings before interest and taxes (EBIT)	$	500.0	$	246.0
Interest		55.0		44.0
Earnings before taxes (EBT)	$	445.0	$	202.0
Taxes (25%)		178.0		80.8
Net income	$	267.0	$	121.2
Common dividends	$	240.3	$	97.0

Powell Panther Corporation: Balance Sheets as of December 31 (millions of dollars)

	2021	2020
Assets
Cash and equivalents	$	36.0	$	30.0
Accounts receivable		375.0		300.0
Inventories		468.0		360.0
Total current assets	$	879.0	$	690.0
Net plant and equipment		621.0		540.0
Total assets	$	1,500.0	$	1,230.0
Liabilities and Equity
Accounts payable	$	250.0	$	200.0
Accruals		75.0		60.0
Notes payable		50.0		40.0
Total current liabilities	$	375.0	$	300.0
Long-term bonds		500.0		400.0
Total liabilities	$	875.0	$	700.0
Common stock		562.0		493.7
Retained earnings		63.0		36.3
Common equity	$	625.0	$	530.0
Total liabilities and equity	$	1,500.0	$	1,230.0

Write out your answers completely. For example, 25 million should be entered as 25,000,000. Round your answers to the nearest dollar, if necessary. Negative values, if any, should be indicated by a minus sign.

What was net operating working capital for 2020 and 2021? Assume the firm has no excess cash.

2020: $

2021: $
What was the 2021 free cash flow?

$
How would you explain the large increase in 2021 dividends?
1. The large increase in net income from 2020 to 2021 explains the large increase in 2021 dividends.
2. The large increase in free cash flow from 2020 to 2021 explains the large increase in 2021 dividends.
3. The large increase in EBIT from 2020 to 2021 explains the large increase in 2021 dividends.
4. The large increase in sales from 2020 to 2021 explains the large increase in 2021 dividends.
5. The large increase in retained earnings from 2020 to 2021 explains the large increase in 2021 dividends.

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