Financial information for Powell Panther Corporation is shown below: Powell Panther Corporation: Income Statements for Year Ending December 31 (Millions of Dollars)     2018 Sales $ 1,625.0 $ 2017 1,300.0 Operating costs excluding depreciation and amortization   1,300.0   1,105.0 EBITDA $ 325.0 $ 195.0 Depreciation and amortization   39.0   31.0 Earnings before interest and taxes (EBIT) $ 286.0 $ 164.0   Interest   36.0   29.0 Earnings before taxes (EBT) $ 250.0 $ 135.0   Taxes (40%)   100.0   54.0 Net income $ 150.0   $ 81.0   Common dividends $ 135.0   $ 65.0   Powell Panther Corporation: Balance Sheets as of December 31 (Millions of Dollars)     2018 Assets Cash and equivalents $ 23.0 $ 2017 18.0   Accounts receivable   164.0   143.0 Inventories   343.0   312.0   Total current assets $ 530.0 $ 473.0 Net plant and equipment   390.0   312.0 Total assets $ 920.0 $ 785.0 Liabilities and Equity Accounts payable $ 94.0 $ 78.0 Accruals   90.0   78.0 Notes payable   33.0   26.0   Total current liabilities $ 217.0 $ 182.0 Long-term bonds   325.0   260.0   Total liabilities $ 542.0 $ 442.0 Common stock   339.0   319.0 Retained earnings   39.0   24.0   Common equity $ 378.0 $ 343.0 Total liabilities and equity $ 920.0   $ 785.0   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? $

Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter7: Operating Assets
Section: Chapter Questions
Problem 24CE
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Financial information for Powell Panther Corporation is shown below:

Powell Panther Corporation: Income Statements for Year Ending December 31 (Millions of Dollars)

   

2018

Sales $ 1,625.0 $

2017

1,300.0

Operating costs excluding depreciation and amortization   1,300.0   1,105.0
EBITDA $ 325.0 $ 195.0
Depreciation and amortization   39.0   31.0
Earnings before interest and taxes (EBIT) $ 286.0 $ 164.0
  Interest   36.0   29.0
Earnings before taxes (EBT) $ 250.0 $ 135.0
  Taxes (40%)   100.0   54.0
Net income $
150.0
 
$
81.0
 
Common dividends $
135.0
 
$
65.0
 

Powell Panther Corporation: Balance Sheets as of December 31 (Millions of Dollars)

    2018
Assets
Cash and equivalents $ 23.0 $

2017

18.0

 

Accounts receivable   164.0   143.0
Inventories   343.0   312.0
  Total current assets $ 530.0 $ 473.0
Net plant and equipment   390.0   312.0
Total assets $ 920.0 $ 785.0
Liabilities and Equity
Accounts payable $ 94.0 $ 78.0
Accruals   90.0   78.0
Notes payable   33.0   26.0
  Total current liabilities $ 217.0 $ 182.0
Long-term bonds   325.0   260.0
  Total liabilities $ 542.0 $ 442.0
Common stock   339.0   319.0
Retained earnings   39.0   24.0
  Common equity $ 378.0 $ 343.0
Total liabilities and equity $
920.0
 
$
785.0
 

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.

 

  1. What was net operating working capital for 2017 and 2018? Assume the firm has no excess cash.

    2017:  $  

    2018:  $  

  2. What was the 2018 free cash flow?

    $  

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