You have just obtained financial information for the past 2

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Reference no: EM13572802

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)


2002

2001

Assets


$ 10.0

Cash and equivalents

$ 12.0

0.0

Short-term investments

0.0

150.0

Accounts receivable

180.0

200.0

Inventories

180.0

$360.0

Total current assets

$372.0

250.0

Net plant and equipment

300.0

$610.0

Total assets

$672.0

$ 10.0

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

150.0

150.0

Total liabilities

$397.0

$351.5

Common stock (50 million shares)

50.0

50.0

Retained earnings

225.0

208.5

Common equity

$275.0

$258.5

Reference no: EM13572802

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