In: Finance
FREE CASH FLOW
Financial information for Powell Panther Corporation is shown
below:
Powell Panther Corporation: Income...
FREE CASH FLOW
Financial information for Powell Panther Corporation is shown
below:
Powell Panther Corporation: Income Statements for Year
Ending December 31 (Millions of Dollars)
|
2016 |
2015 |
Sales |
$2,875.0 |
$2,500.0 |
Operating costs excluding depreciation and amortization |
2,300.0 |
2,125.0 |
EBITDA |
$575.0 |
$375.0 |
Depreciation and amortization |
84.0 |
68.0 |
Earnings before interest and taxes (EBIT) |
$491.0 |
$307.0 |
Interest |
63.0 |
55.0 |
Earnings before taxes (EBT) |
$428.0 |
$252.0 |
Taxes (40%) |
171.2 |
100.8 |
Net income |
|
|
Common dividends |
|
|
Powell Panther Corporation: Balance Sheets as of
December 31 (Millions of Dollars)
|
2016 |
2015 |
Assets |
Cash and equivalents |
$46.0 |
$38.0 |
Accounts receivable |
275.0 |
250.0 |
Inventories |
575.0 |
500.0 |
Total current assets |
$896.0 |
$788.0 |
Net plant and equipment |
844.0 |
675.0 |
Total assets |
|
|
Liabilities and Equity |
Accounts payable |
$248.0 |
$225.0 |
Accruals |
228.0 |
175.0 |
Notes payable |
58.0 |
50.0 |
Total current liabilities |
$534.0 |
$450.0 |
Long-term bonds |
575.0 |
500.0 |
Total liabilities |
$1,109.0 |
$950.0 |
Common stock |
560.2 |
468.0 |
Retained earnings |
70.8 |
45.0 |
Common equity |
$631.0 |
$513.0 |
Total liabilities and equity |
|
|
Write out your answers completely. For example, 25 million
should be entered as 25,000,000.
- What was net operating working capital for 2015 and 2016?
2015: $
2016: $
- What was the 2016 free cash flow?
$
- How would you explain the large increase in 2016
dividends?
- The large increase in net income from 2015 to 2016 explains the
large increase in 2016 dividends.
- The large increase in free cash flow from 2015 to 2016 explains
the large increase in 2016 dividends.
- The large increase in EBIT from 2015 to 2016 explains the large
increase in 2016 dividends.
- The large increase in sales from 2015 to 2016 explains the
large increase in 2016 dividends.
- The large increase in retained earnings from 2015 to 2016
explains the large increase in 2016 dividends.