Financial information for Powell Panther Corporation is shown below: Powell Panther Corporation: Income Statements for Year Ending December 31 (Millions of Dollars) 2018 2017 Sales $ 3,900.0 $ 3,000.0 Operating costs excluding depreciation and amortization 2,925.0 2,550.0 EBITDA $ 975.0 $ 450.0 Depreciation and amortization 90.0 69.0 Earnings before interest and taxes (EBIT) $ 885.0 $ 381.0 Interest 86.0 66.0 Earnings before taxes (EBT) $ 799.0 $ 315.0 Taxes (40%) 319.6 126.0 Net income $ 479.4 $ 189.0 Common dividends $ 431.0 $ 151.0 Powell Panther Corporation: Balance Sheets as of December 31 (Millions of Dollars) 2018 2017 Assets Cash and equivalents $ 38.0 $ 30.0 Accounts receivable 432.0 360.0 Inventories 819.0 630.0 Total current assets $ 1,289.0 $ 1,020.0 Net plant and equipment 897.0 690.0 Total assets $ 2,186.0 $ 1,710.0 Liabilities and Equity Accounts payable $ 207.0 $ 180.0 Accruals 173.0 150.0 Notes payable 78.0 60.0 Total current liabilities $ 458.0 $ 390.0 Long-term bonds 780.0 600.0 Total liabilities $ 1,238.0 $ 990.0 Common stock 842.6 663.0 Retained earnings 105.4 57.0 Common equity $ 948.0 $ 720.0 Total liabilities and equity $ 2,186.0 $ 1,710.0 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 2017 and 2018? Assume the firm has no excess cash. 2017: $ 2018: $ What was the 2018 free cash flow? $ How would you explain the large increase in 2018 dividends? The large increase in net income from 2017 to 2018 explains the large increase in 2018 dividends. The large increase in EBIT from 2017 to 2018 explains the large increase in 2018 dividends. The large increase in sales from 2017 to 2018 explains the large increase in 2018 dividends. The large increase in free cash flow from 2017 to 2018 explains the large increase in 2018 dividends. The large increase in retained earnings from 2017 to 2018 explains the large increase in 2018 dividends.
Financial information for Powell Panther Corporation is shown below: Powell Panther Corporation: Income Statements for Year Ending December 31 (Millions of Dollars) 2018 2017 Sales $ 3,900.0 $ 3,000.0 Operating costs excluding depreciation and amortization 2,925.0 2,550.0 EBITDA $ 975.0 $ 450.0 Depreciation and amortization 90.0 69.0 Earnings before interest and taxes (EBIT) $ 885.0 $ 381.0 Interest 86.0 66.0 Earnings before taxes (EBT) $ 799.0 $ 315.0 Taxes (40%) 319.6 126.0 Net income $ 479.4 $ 189.0 Common dividends $ 431.0 $ 151.0 Powell Panther Corporation: Balance Sheets as of December 31 (Millions of Dollars) 2018 2017 Assets Cash and equivalents $ 38.0 $ 30.0 Accounts receivable 432.0 360.0 Inventories 819.0 630.0 Total current assets $ 1,289.0 $ 1,020.0 Net plant and equipment 897.0 690.0 Total assets $ 2,186.0 $ 1,710.0 Liabilities and Equity Accounts payable $ 207.0 $ 180.0 Accruals 173.0 150.0 Notes payable 78.0 60.0 Total current liabilities $ 458.0 $ 390.0 Long-term bonds 780.0 600.0 Total liabilities $ 1,238.0 $ 990.0 Common stock 842.6 663.0 Retained earnings 105.4 57.0 Common equity $ 948.0 $ 720.0 Total liabilities and equity $ 2,186.0 $ 1,710.0 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 2017 and 2018? Assume the firm has no excess cash. 2017: $ 2018: $ What was the 2018 free cash flow? $ How would you explain the large increase in 2018 dividends? The large increase in net income from 2017 to 2018 explains the large increase in 2018 dividends. The large increase in EBIT from 2017 to 2018 explains the large increase in 2018 dividends. The large increase in sales from 2017 to 2018 explains the large increase in 2018 dividends. The large increase in free cash flow from 2017 to 2018 explains the large increase in 2018 dividends. The large increase in retained earnings from 2017 to 2018 explains the large increase in 2018 dividends.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
Financial information for Powell Panther Corporation is shown below:
Powell Panther Corporation: Income Statements for Year Ending December 31 (Millions of Dollars)
2018 | 2017 | |||||||
Sales | $ | 3,900.0 | $ | 3,000.0 | ||||
Operating costs excluding |
2,925.0 | 2,550.0 | ||||||
EBITDA | $ | 975.0 | $ | 450.0 | ||||
Depreciation and amortization | 90.0 | 69.0 | ||||||
Earnings before interest and taxes (EBIT) | $ | 885.0 | $ | 381.0 | ||||
Interest | 86.0 | 66.0 | ||||||
Earnings before taxes (EBT) | $ | 799.0 | $ | 315.0 | ||||
Taxes (40%) | 319.6 | 126.0 | ||||||
Net income | $ |
|
$ |
|
||||
Common dividends | $ |
|
$ |
|
Powell Panther Corporation:
2018 | 2017 | |||||||
Assets | ||||||||
Cash and equivalents | $ | 38.0 | $ | 30.0 | ||||
Accounts receivable | 432.0 | 360.0 | ||||||
Inventories | 819.0 | 630.0 | ||||||
Total current assets | $ | 1,289.0 | $ | 1,020.0 | ||||
Net plant and equipment | 897.0 | 690.0 | ||||||
Total assets | $ | 2,186.0 | $ | 1,710.0 | ||||
Liabilities and Equity | ||||||||
Accounts payable | $ | 207.0 | $ | 180.0 | ||||
Accruals | 173.0 | 150.0 | ||||||
Notes payable | 78.0 | 60.0 | ||||||
Total current liabilities | $ | 458.0 | $ | 390.0 | ||||
Long-term bonds | 780.0 | 600.0 | ||||||
Total liabilities | $ | 1,238.0 | $ | 990.0 | ||||
Common stock | 842.6 | 663.0 | ||||||
105.4 | 57.0 | |||||||
Common equity | $ | 948.0 | $ | 720.0 | ||||
Total liabilities and equity | $ |
|
$ |
|
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 2017 and 2018? Assume the firm has no excess cash.
2017: $
2018: $
-
What was the 2018
free cash flow ?$
- How would you explain the large increase in 2018 dividends?
- The large increase in net income from 2017 to 2018 explains the large increase in 2018 dividends.
- The large increase in EBIT from 2017 to 2018 explains the large increase in 2018 dividends.
- The large increase in sales from 2017 to 2018 explains the large increase in 2018 dividends.
- The large increase in free cash flow from 2017 to 2018 explains the large increase in 2018 dividends.
- The large increase in retained earnings from 2017 to 2018 explains the large increase in 2018 dividends.
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