Financial Information for Powell Panther Corporation is shown below:Powell Panther Corporation: Income Statements for Year Ending December 31 (millions of dollars)SalesOperating costs excluding depreciation and amortizationEBITDADepreciation and amortizationEarnings before interest and taxes (EBIT)InterestAssetsCash and equivalentsAccounts receivableInventoriesTotal current assetsNet plant and equipmentTotal assetsLiabilities and EquityAccounts payableAccrualsEarnings before taxes (EBT)Taxes (25%)Net IncomeCommon dividendsPowell Panther Corporation: Balance Sheets as of December 31 (millions of dollars)20202021: $b. What was the 2021 free cash flow?2021$3,300.02,805.0$495.0$2020$3,000.02,550.0$450.072.0$378.066.0$312.0124.8$187.2$181.6 $149.8-Select-86.0$ 409.072.6$ 336.4134.6$201.8202150.0 $483.0725.0$1,258.0864.0$2,122.0$264.0225.0Notes payable66.0Total current liabilities$ 555.0Long-term bonds660.0Total liabilities$1,215.0Common stock830.7Retained earnings76.3Common equity$ 907.0Total llabilities and equity$2,122.0Write 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, shouldbe indicated by a minus sign.a. What was net operating working capital for 2020 and 2021? Assume the firm has no excess cash.2020: $42.0420.0630.0$1,092.0720.0$1,812.0$240.0180.060.0$ 480.0600.0$1,080.0675.956.1$ 732.0$1,812.0$c. How would you explain the large increase in 2021 dividends?1. The large increase in net income from 2020 to 2021 explains the large increase in 2021 dividends.II. The large increase in EBIT from 2020 to 2021 explains the large increase in 2021 dividends.III. The large increase in sales from 2020 to 2021 explains the large increase in 2021 dividends.IV. The large increase in retained earnings from 2020 to 2021 explains the large increase in 2021 dividends.V. The large increase in free cash flow from 2020 to 2021 explains the large increase in 2021 dividends.

The decision of issuance of dividend can be influenced by various factors like net income, retained…

Financial Information for Powell Panther Corporation is shown below: Powell Panther Corporation: Income Statements for Year Ending December 31 (millions of dollars) 2021 $3,300.0 2,805.0 $495.0 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 86.0 $ 409.0 72.6 $336.4 134.6 $201.8 Common dividends $ 181.6 Powell Panther Corporation: Balance Sheets as of December 31 (millions of dollars) 2020 Assets Cash and equivalents Accounts receivable Inventories Total current assets Net plant and equipment Total assets Liabilities and Equity Accounts payable Accruals Notes payable Total current liabilities 2020: $ 2021: $ b. What was the 2021 free cash flow? $ 2021 50.0 483.0 725.0 $1,258.0 864.0 $2,122.0 -Select- $ 264.0 225.0 66.0 $ 555.0 660.0 2020 $3,000.0 2,550.0 $450.0 $ $1,215.0 830,7 76.3 $ 907.0 $2,122.0 72.0 $ 378.0 66.0 $312.0 124.8 $187.2 $149.8 Long-term bonds Total liabilities 600.0 $1,080.0 675.9 Common stock Retained earnings 56.1 Common equity $ 732.0 Total llabilities and equity $1,812.0 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. a. What was net operating working capital for 2020 and 2021? Assume the firm has no excess cash. 42.0 420.0 630.0 $1,092.0 720.0 $1,812.0 $240.0 180.0 60.0 $ 480.0 $ c. How would you explain the large increase in 2021 dividends? 1. The large increase in net income from 2020 to 2021 explains the large increase in 2021 dividends. II. The large increase in EBIT from 2020 to 2021 explains the large increase in 2021 dividends. III. The large increase in sales from 2020 to 2021 explains the large increase in 2021 dividends. IV. The large increase in retained earnings from 2020 to 2021 explains the large increase in 2021 dividends. V. The large increase in free cash flow from 2020 to 2021 explains the large increase in 2021 dividends.

Financial Information for Powell Panther Corporation is shown below: Powell Panther Corporation: Income Statements for Year Ending December 31 (millions of dollars) 2021 $3,300.0 2,805.0 $495.0 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 86.0 $ 409.0 72.6 $336.4 134.6 $201.8 Common dividends $ 181.6 Powell Panther Corporation: Balance Sheets as of December 31 (millions of dollars) 2020 Assets Cash and equivalents Accounts receivable Inventories Total current assets Net plant and equipment Total assets Liabilities and Equity Accounts payable Accruals Notes payable Total current liabilities 2020: $ 2021: $ b. What was the 2021 free cash flow? $ 2021 50.0 483.0 725.0 $1,258.0 864.0 $2,122.0 -Select- $ 264.0 225.0 66.0 $ 555.0 660.0 2020 $3,000.0 2,550.0 $450.0 $ $1,215.0 830,7 76.3 $ 907.0 $2,122.0 72.0 $ 378.0 66.0 $312.0 124.8 $187.2 $149.8 Long-term bonds Total liabilities 600.0 $1,080.0 675.9 Common stock Retained earnings 56.1 Common equity $ 732.0 Total llabilities and equity $1,812.0 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. a. What was net operating working capital for 2020 and 2021? Assume the firm has no excess cash. 42.0 420.0 630.0 $1,092.0 720.0 $1,812.0 $240.0 180.0 60.0 $ 480.0 $ c. How would you explain the large increase in 2021 dividends? 1. The large increase in net income from 2020 to 2021 explains the large increase in 2021 dividends. II. The large increase in EBIT from 2020 to 2021 explains the large increase in 2021 dividends. III. The large increase in sales from 2020 to 2021 explains the large increase in 2021 dividends. IV. The large increase in retained earnings from 2020 to 2021 explains the large increase in 2021 dividends. V. The large increase in free cash flow from 2020 to 2021 explains the large increase in 2021 dividends.

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter15: Financial Statement Analysis

Section: Chapter Questions

Problem 32BEB

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