Question

Hello please advise, thank you

Sales Financial information for Powell Panther Corporation is shown below: Powell Panther Corporation: Income Statements for Year Ending December 31 (Millions of Dollars) 2019 2018 $1,650.0 $1,500.0 Operating costs excluding depreciation and amortization 1,238.0 1.275.0 EBITDA $ 412.0 $ 225.0 Depreciation and amortization 53.0 41.0 Earnings before interest and taxes (EBIT) $ 359.0 $ 184.0 Interest 36.3 33.0 Earnings before taxes (EBT) $ 322.7 $ 151.0 Taxes (25%) 129.1 60.4 Net income $ 193.6 $ 90.6 Common dividends $ 174.2 $ 72.5

I tried and got wrong.

For A $315 and $362 It was wrong

For B 100.25 it was wrong .

For C ii it was wrong

Answer 1

SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE

ve dx 07:17 E ENG 16 01 2020 ES 011/12 fix - X CBCC CD CE CF CG CH CI C C K POWELL PANTHER NET OPERATING WORKING CAPITAL = NET OPERATING WORKING CAPITAL = 2018 2019 2018= 2019 = CURRENT ASSETS - (CURRENT LIABILITIES - NOTES PAYABLE) 542 - (210-30) = 362 633 - (249-33) = 417 362000000 417000000 ANSWER NET OPERATING WORKING CAPITAL = 1171 1172 1173 1174 1175 1176 1177 1178 1179 1180 1181 1182 1183 1184 1185 1186 1187 1188 1189 CHANGE IN NET OPERATING WORKING CAPITAL = 417-362 = 55 CAPITAL EXPENDITURE = NET FIXED ASSETS IN 2019 + DEPRECIATION FOR 2019 - NET FIXED ASSETS IN 2018 527 + 53 - 405 = 175 FREE CASH FLOW = EBIT(1-t) + DEPRECIATION - CAPITAL EXPENDITURE - CHANGE IN NET OPERATING WORKING CAPITAL 359*(1-0.25) + 53 - 175 - 55 = 92.25 ANSWER FREE CASH FLOW = 92250000 1190 1191 ANSWER I. The large increase in free cash flow from 2018 to 2019 explains the large increase in 2019 dividends. 1192 1193 1194 1195 1196 ... OCF CASH FLOW STATW FCFARM, MSI,conlidenceINDEX CURRENCY LOAN CROSS OVER HEDGING MONEY MARKET GM HPR AM TAX GROWTH SUST PREF AND DIV POLICY ... 6 T D