Financial information for Powell Panther Corporation

jagguarpaw January 18, 2017 0 Comments

Question: Financial information for Powell Panther Corporation…

Problem 3-17
FREE CASH FLOW

Financial information for Powell Panther Corporation is shown below:

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

2016 2015
Sales $3,335.0 $2,900.0
Operating costs excluding depreciation and amortization 2,835.0 2,465.0
EBITDA $500.0 $435.0
Depreciation and amortization 97.0 81.0
Earnings before interest and taxes (EBIT) $403.0 $354.0
  Interest 73.0 64.0
Earnings before taxes (EBT) $330.0 $290.0
  Taxes (40%) 132.0 116.0
Net income
$198.0
$174.0
Common dividends
$178.0
$139.0

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

2016 2015
Assets
Cash and equivalents $46.0 $38.0
Accounts receivable 566.0 435.0
Inventories 500.0 435.0
  Total current assets $1,112.0 $908.0
Net plant and equipment 974.0 812.0
Total assets
$2,086.0
$1,720.0
Liabilities and Equity
Accounts payable $334.0 $290.0
Accruals 226.0 174.0
Notes payable 67.0 58.0
  Total current liabilities $627.0 $522.0
Long-term bonds 667.0 580.0
  Total liabilities $1,294.0 $1,102.0
Common stock 719.0 565.0
Retained earnings 73.0 53.0
  Common equity $792.0 $618.0
Total liabilities and equity
$2,086.0
$1,720.0

Write out your answers completely. For example, 25 million should be entered as 25,000,000.

What was net operating working capital for 2015 and 2016?

2015:  $    444000000

2016:  $   552000000

What was the 2016 free cash flow?