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You have just obtained financial information for the past 2 years for Powell Panther Corporation. Answer the following questions.
a. What is the net operating profit after taxes (NOPAT) for 2002?
b. What are the amounts of net operating working capital for 2001 and 2002?
c. What are the amounts of total operating capital for 2001 and 2002?
d. What is the free cash flow for 2002?
e. How can you explain the large increase in dividends in 2002?
Powell Panther Corporation: Income Statements for Year Ending December 31 (Millions of Dollars)
2002
2001
Sales
$1,200.0
$1,000.0
Operating costs excluding depreciation
1,020.0
850.0
Depreciation
30.0
25.0
Earnings before interest and taxes
$ 150.0
$ 125.0
Less interest
21.7
20.2
Earnings before taxes
$ 128.3
$ 104.8
Taxes (40%)
51.3
41.9
Net income available to common stockholders
$ 77.0
$ 62.9
Common dividends
60.5
4.4
Powell Panther Corporation: Balance Sheets as of December 31 (Millions of Dollars)
Assets
$ 10.0
Cash and equivalents
$ 12.0
0.0
Short-term investments
150.0
Accounts receivable
180.0
200.0
Inventories
$360.0
Total current assets
$372.0
250.0
Net plant and equipment
300.0
$610.0
Total assets
$672.0
Liabilities and Equity
Accounts payable
$108.0
$ 90.0
Notes payable
67.0
51.5
Accruals
72.0
60.0
Total current liabilities
$247.0
$201.5
Long-term bonds
Total liabilities
$397.0
$351.5
Common stock (50 million shares)
50.0
Retained earnings
225.0
208.5
Common equity
$275.0
$258.5
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