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
|