2021		2020
Sales	$	1,440.0	$	1,200.0
Operating costs excluding depreciation and amortization		1,116.0		1,020.0
EBITDA	$	324.0	$	180.0
Depreciation and amortization		30.0		24.0
Earnings before interest and taxes (EBIT)	$	294.0	$	156.0
Interest		31.7		26.4
Earnings before taxes (EBT)	$	262.3	$	129.6
Taxes (25%)		104.9		51.8
Net income	$	157.4	$	77.8
Common dividends	$	141.7	$	62.2

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

	2021		2020
Assets
Cash and equivalents	$	18.0	$	16.0
Accounts receivable		172.0		156.0
Inventories		330.0		264.0
Total current assets	$	520.0	$	436.0
Net plant and equipment		300.0		240.0
Total assets	$	820.0	$	676.0
Liabilities and Equity
Accounts payable	$	132.0	$	120.0
Accruals		75.0		60.0
Notes payable		28.8		24.0
Total current liabilities	$	235.8	$	204.0
Long-term bonds		288.0		240.0
Total liabilities	$	523.8	$	444.0
Common stock		257.1		208.6
Retained earnings		39.1		23.4
Common equity	$	296.2	$	232.0
Total liabilities and equity	$	820.0	$	676.0

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.

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

   2020: $

   2021: $

2. What was the 2021 free cash flow?

   $

3. 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 EBIT from 2020 to 2021 explains the large increase in 2021 dividends.
   3. The large increase in sales from 2020 to 2021 explains the large increase in 2021 dividends.
   4. The large increase in free cash flow 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.