1. What was net operating working capital for 2018 and 2019? Assume the firm has no excess cash.

2. What was the 2019 free cash flow?

3. How would you explain the large increase in 2019 dividends?

Powell Panther Corporation: Income Statements for Year Ending December 31 (Millions of Dollars) 2019 2018 $ 1,200.0 1,020.0 $ 180.0 $1,000.0 850.0 $ 150,0 30.0 Sales Operating costs excluding depreciation and amortization EBITDA Depreciation and amortization Earnings before interest and taxes (EBIT) Interest Earnings before taxes (EBT) Taxes (25%) Net Income Common dividends $ 150.0 21.7 25.0 $ 125.0 20.2 $ 128.3 32.1 96.2 79.7 $ 104.8 26.2 $78.6 5 61.3 $ $ Powell Panther Corporation: Balance Sheets as of December 31 (Millions of Dollars) 2019 2018 Assets Cash and equivalents $ 12.0 $ 10.0 Accounts receivable 180.0 150.0 Inventories 180.0 200.0 Total current assets $ 372.0 $360.0 Net plant and equipment 300.0 250.0 Total assets $672.0 5 610.0 Liabilities and Equity Accounts payable $108.0 $ 90,0 Accruals 72.0 60.0 Notes payable 67.0 515 Total current liabilities $247.0 $ 2015 Long-term bonds 150.0 150.0 Total liabilities $3970 $3515 Common stock (50 million shares 50.0 50.0 Retained earnings 225.0 2085 $275.0 $ 2585 Total liabilities and equity $6720 $ 6100 Common equity