Financial information for Powell Panther Corporation is shown below:

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

20212020Sales$1,725.0$1,500.0Operating costs excluding depreciation and amortization1,294.01,275.0EBITDA$431.0$225.0Depreciation and amortization36.030.0Earnings before interest and taxes (EBIT)$395.0$195.0Interest38.033.0Earnings before taxes (EBT)$357.0$162.0Taxes (25%)142.864.8Net income$214.2$97.2Common dividends$192.8$77.8

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

20212020AssetsCash and equivalents$30.0$23.0Accounts receivable234.0195.0Inventories429.0330.0Total current assets$693.0$548.0Net plant and equipment360.0300.0Total assets$1,053.0$848.0Liabilities and EquityAccounts payable$104.0$90.0Accruals121.0105.0Notes payable34.530.0Total current liabilities$259.5$225.0Long-term bonds345.0300.0Total liabilities$604.5$525.0Common stock398.0293.9Retained earnings50.529.1Common equity$448.5$323.0Total liabilities and equity$1,053.0$848.0

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 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 retained earnings from 2020 to 2021 explains the large increase in 2021 dividends.
5. The large increase in free cash flow from 2020 to 2021 explains the large increase in 2021 dividends.