Financial information for Powell Panther Corporation is shown here. Powell Panther Corporation: Income Statements for Year Ending December 31 (Millions of Dollars) 2018 2017 Sales $ 1,200.0 $1,000.0 Operating costs excluding depreciation and amortization 1,020.0 850.0 EBITDA $ 180.0 $ 150.0 Depreciation and amortization Earnings before interest and taxes (EBIT) 30.0 25.0 $ 150.0 $ 125.0 Interest 21.7 20.2 Earnings before taxes (EBT) $ 128.3 $ 104.8 Taxes (40%) 51.3 41.9 Net income 77.0 24 62.9 Common dividends 60.5 46.4 Powell Panther Corporation: Balance Sheets as of December 31 (Millions of Dollars) 2018 2017 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 $ 610.0 Liabilities and Equity Accounts payable $108.0 $ 90.0 Accruals 72.0 60.0 Notes payable 67.0 51.5 Total current liabilities $247.0 $ 201.5 Long-term bonds 150.0 150.0 Total liabilities $397.0 $ 351.5 Common stock (50 million shares) 50.0 50.0 Retained earnings 225.0 208.5 Common equity $275.0 $ 258.5 Total liabilities and equity $672.0 $ 610.0
Reporting Cash Flows
Reporting of cash flows means a statement of cash flow which is a financial statement. A cash flow statement is prepared by gathering all the data regarding inflows and outflows of a company. The cash flow statement includes cash inflows and outflows from various activities such as operating, financing, and investment. Reporting this statement is important because it is the main financial statement of the company.
Balance Sheet
A balance sheet is an integral part of the set of financial statements of an organization that reports the assets, liabilities, equity (shareholding) capital, other short and long-term debts, along with other related items. A balance sheet is one of the most critical measures of the financial performance and position of the company, and as the name suggests, the statement must balance the assets against the liabilities and equity. The assets are what the company owns, and the liabilities represent what the company owes. Equity represents the amount invested in the business, either by the promoters of the company or by external shareholders. The total assets must match total liabilities plus equity.
Financial Statements
Financial statements are written records of an organization which provide a true and real picture of business activities. It shows the financial position and the operating performance of the company. It is prepared at the end of every financial cycle. It includes three main components that are balance sheet, income statement and cash flow statement.
Owner's Capital
Before we begin to understand what Owner’s capital is and what Equity financing is to an organization, it is important to understand some basic accounting terminologies. A double-entry bookkeeping system Normal account balances are those which are expected to have either a debit balance or a credit balance, depending on the nature of the account. An asset account will have a debit balance as normal balance because an asset is a debit account. Similarly, a liability account will have the normal balance as a credit balance because it is amount owed, representing a credit account. Equity is also said to have a credit balance as its normal balance. However, sometimes the normal balances may be reversed, often due to incorrect journal or posting entries or other accounting/ clerical errors.
a. What was net operating working capital for 2017 and 2018? Assume the firm has no
excess cash.
b. What was the 2018
c. How would you explain the large increase in 2018 dividends?
3-18 PERSONAL TA XES Mary Jarvis is a single individual who is working
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