Powell Panther Corporation: Income Statements for Year Ending December 31 (Millions of Dollars)

20182017Sales$1,870.0$1,700.0Operating costs excluding depreciation and amortization1,449.01,445.0EBITDA$421.0$255.0Depreciation and amortization51.043.0Earnings before interest and taxes (EBIT)$370.0$212.0Interest41.037.0Earnings before taxes (EBT)$329.0$175.0Taxes (40%)131.670.0Net income$197.4$105.0Common dividends$178.0$84.0

Powell Panther Corporation: Balance Sheets as of December 31 (Millions of Dollars)

20182017AssetsCash and equivalents$28.0$24.0Accounts receivable287.0221.0Inventories469.0408.0Total current assets$784.0$653.0Net plant and equipment510.0425.0Total assets$1,294.0$1,078.0Liabilities and EquityAccounts payable$117.0$102.0Accruals156.0136.0Notes payable37.034.0Total current liabilities$310.0$272.0Long-term bonds374.0340.0Total liabilities$684.0$612.0Common stock558.6434.0Retained earnings51.432.0Common equity$610.0$466.0Total liabilities and equity$1,294.0$1,078.0

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 2017 and 2018? Assume the firm has no excess cash.
2. 2017:$
3. 2018:$
4. What was the 2018 free cash flow?
5. $
6. How would you explain the large increase in 2018 dividends?
8. The large increase in net income from 2017 to 2018 explains the large increase in 2018 dividends.
9. The large increase in EBIT from 2017 to 2018 explains the large increase in 2018 dividends.
10. The large increase in sales from 2017 to 2018 explains the large increase in 2018 dividends.
11. The large increase in free cash flow from 2017 to 2018 explains the large increase in 2018 dividends.
12. The large increase in retained earnings from 2017 to 2018 explains the large increase in 2018 dividends