Powell Panther Corporation: Income Statements for Year Ending December 31 (millions of dollars) 2021 2020 Sales $3,240.0 $2,700.0 Operating costs excluding depreciation and amortization 2.673.0 2.295.0 EBITDA $ 567.0 $ 405.0 Depreciation and amortization 101.0 81.0 Earnings before interest and taxes (EBIT) $ 466.0 $ 324.0 Interest 71.3 59.4 Earnings before taxes (EBT) $ 394.7 $ 264.6 Taxes (25%) 157.9 105.8 $ 158.8 $ 127.0 Net income $ 236.8 Common dividends $ 213.1 Powell Panther Corporation: Balance Sheets as of December 31 (millions of dollars) 2021 2020 Assets Cash and equivalents $ 34.0 $ 27.0 Accounts receivable 327.0 297.0 Inventories 597.0 459.0 Total current assets $ 958.0 $ 783.0 Net plant and equipment 1.013.0 810.0 Total assets $1,971.0 $1,593.0 Liabilities and Equity Accounts payable $ 203.0 $ 162.0 Accruals 194.0 162.0 Notes payable 64.8 54.0 Total current liabilities $ 461.8 $ 378.0 Long-term bonds 648.0 540.0 Total liabilities $1,109.8 $ 918.0 Common stock 789.8 627.3 Retained earnings 71.4 47.7 Common equity $ 861.2 $ 675.0 Total liabilities and equity $1,971.0 $1,593.0 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.
Powell Panther Corporation: Income Statements for Year Ending December 31 (millions of dollars) 2021 2020 Sales $3,240.0 $2,700.0 Operating costs excluding depreciation and amortization 2.673.0 2.295.0 EBITDA $ 567.0 $ 405.0 Depreciation and amortization 101.0 81.0 Earnings before interest and taxes (EBIT) $ 466.0 $ 324.0 Interest 71.3 59.4 Earnings before taxes (EBT) $ 394.7 $ 264.6 Taxes (25%) 157.9 105.8 $ 158.8 $ 127.0 Net income $ 236.8 Common dividends $ 213.1 Powell Panther Corporation: Balance Sheets as of December 31 (millions of dollars) 2021 2020 Assets Cash and equivalents $ 34.0 $ 27.0 Accounts receivable 327.0 297.0 Inventories 597.0 459.0 Total current assets $ 958.0 $ 783.0 Net plant and equipment 1.013.0 810.0 Total assets $1,971.0 $1,593.0 Liabilities and Equity Accounts payable $ 203.0 $ 162.0 Accruals 194.0 162.0 Notes payable 64.8 54.0 Total current liabilities $ 461.8 $ 378.0 Long-term bonds 648.0 540.0 Total liabilities $1,109.8 $ 918.0 Common stock 789.8 627.3 Retained earnings 71.4 47.7 Common equity $ 861.2 $ 675.0 Total liabilities and equity $1,971.0 $1,593.0 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.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter12: Intangibles
Section: Chapter Questions
Problem 10MC
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Question
100%
Transcribed Image Text:Powell Panther Corporation: Income Statements for Year Ending December 31 (millions of dollars)
2021
2020
Sales
$ 3,240.0
$2,700.0
Operating costs excluding depreciațion and amortization
2,673.0
2,295.0
EBITDA
$ 567.0
$ 405.0
Depreciation and amortization
101.0
81.0
Earnings before interest and taxes (EBIT)
$ 466.0
$ 324.0
Interest
71.3
59.4
Earnings before taxes (EBT)
$ 394.7
$ 264.6
Taxes (25%)
157.9
105.8
Net income
$ 236.8
24
158.8
Common dividends
$ 213.1
$ 127.0
Powell Panther Corporation: Balance Sheets as of December 31 (millions of dollars)
2021
2020
Assets
Cash and equivalents
2$
34.0
24
27.0
Accounts receivable
327.0
297.0
Inventories
597.0
459.0
Total current assets
$ 958.0
%24
$ 783.0
Net plant and equipment
1,013.0
810.0
Total assets
$1,971.0
$1,593.0
Liabilities and Equity
Accounts payable
$ 203.0
$ 162.0
Accruals
194.0
162.0
Notes payable
64.8
54.0
Total current liabilities
$ 461.8
$ 378.0
Long-term bonds
648.0
540.0
Total liabilities
$1,109.8
$ 918.0
Common stock
789.8
627.3
Retained earnings
71.4
47.7
Common equity
$ 861.2
675.0
Total liabilities and equity
$1,971.0
$1,593.0
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.
Transcribed Image Text:a. What was net operating working capital for 2020 and 2021? Assume the firm has no excess cash.
2020: $
2021: $
b. What was the 2021 free cash flow?
c. How would you explain the large increase in 2021 dividends?
I. 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 free cash flow from 2020 to 2021 explains the large increase in 2021 dividends.
V. The large increase in retained earnings from 2020 to 2021 explains the large increase in 2021 dividends.
-Select-
-Select-
II
III
IV
V
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