Answered step by step
Verified Expert Solution
Question
1 Approved Answer
17. Financial information for Powell Panther Corporation is shown below Powell Panther Corporation: Income Statements for Year Ending December 31 (Millions of Dollars) 2018 2017
17.
Financial information for Powell Panther Corporation is shown below Powell Panther Corporation: Income Statements for Year Ending December 31 (Millions of Dollars) 2018 2017 Sales $3,480.0 2,900.0 Operating costs excluding depreciation and amortization 2,958.0 2,465.0 EBITDA 522.0 435.0 Depreciation and amortization 73.0 67.0 Earnings before interest and taxes (EBIT) 449.0 $ 368.0 Interest 77.0 64.0 Earnings before taxes (EBT) Taxes (40%) 372.0 $ 304.0 148.8 121.6 $ 223.2 $ 182.4 Net income $ 201.0 Common dividends S 146.0 Powell Panther Corporation: Balance Sheets as of December 31 (Millions of Dollars) 2018 2017 Assets Cash and equivalents 32.0 29.0 Accounts receivable 471.0 377.0 Inventories 510.0 464.0 Total current assets $1,013.0 870.0 Net plant and equipment 734.0 667.0 $ 1,537.0 Total assets 1,747.0 Liabilities and Equity Accounts payable 339.0 261.0 Accruals 313.0 261.0 Notes payable 70.0 58.0 Total current liabilities S 722.0 580.0 Long-term bonds 696.0 580.0 Total liabilities $1,160.0 $1,418.0 Common stock 251.8 322.0 Retained earnings 77.2 55.0 Common equity 329.0 $ 377.0 Total liabilities and equity $1,747.0 $1,537.0 Write out your answers completely. For example, 25 million should be entered as 25,000,000. Round your answers o the nearest dollar, if necessary. Negative values, any, should be indicated y a minus sign. What was net operating working capital for 2017 and 2018? Assume the firm has no excess cash. 2017: $ 2018: b. What was the 2018 free cash flow? c. How would you explain the large increase in 2018 dividends? I. The large increase in net income from 2017 to 2018 explains the large increase in 2018 dividends. II. The large increase in EBIT from 2017 to 2018 explains the large increase in 2018 dividends. III. The large increase i sales from 2017 to 2018 explains the large increase in 2018 dividends. IV. The large increase i v. The large increase in free cash flow from 2017 to 2018 explains the large increase in 2018 dividends. retained earnings from 2017 to 2018 explains the large increase in 2018 dividends. SelectStep by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started