Reference no: EM132474348

Financial information for Powell Panther Corporation is shown below:
Powell Panther Corporation: Income Statements for Year Ending December 31 (Millions of Dollars)

	2019	2018
Sales	$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	EU	41.Q
Earnings before interest and taxes (EBIT)	$        359.0	$       184.0

Interest	14.1	Th2
Earnings before taxes (EBT)	$                            322.7	$       151.0
Taxes (25%)	129.1	NA
Net income	$                            193.6	$         90.6
Common dividends	$                            174.2	$         72.5

Question 1: a. What was net operating working capital for 2018 and 2019? Assume the firm has no excess cash. 2018: $ 2019: $

Question 1: b. What was the 2019 free cash flow?

Question 1: c. How would you explain the large increase in 2019 dividends?

I. The large increase in free cash flow from 2018 to 2019 explains the large increase in 2019 dividends.

II. The large increase in net income from 2018 to 2019 explains the large increase in 2019 dividends.

III. The large increase in BIT from 2018 to 2019 explains the large increase in 2019 dividends.

IV. The large increase in sales from 2018 to 2019 explains the large increase in 2019 dividends.

V. The large increase in retained earnings from 2018 to 2019 explains the large increase in 2019 dividends.