Free Cash Flow Financial information for Powell Panther Corporation is shown bel
ID: 2692044 • Letter: F
Question
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)
Powell Panther Corporation: Balance Sheets as of December 31 (Millions of Dollars)
Write out your answers completely. For example, 25 million should be entered as 25,000,000.
? 2012 2011 Sales $3,375.0 $2,700.0 Operating costs excluding depreciation and amortization 2,784.0 2,295.0 EBITDA $591.0 $405.0 Depreciation and amortization 71.0 59.0 Earnings before interest and taxes $520.0 $346.0 Interest 74.0 59.0 Earnings before taxes $446.0 $287.0 Taxes (40%) 178.4 114.8 Net income $267.6 $172.2 Common dividends $241.0 $138.0Explanation / Answer
1) NET OPERATING CAPITAL FOR 2012 IS 138,000,000$ 2) 2012 FREE CASH FLOW IS 241,000,000$ 3)1)YES, BECAUSE TAXES AND OTHER ALLOWANCES ARE ALWAYS BASED ON THE ANNUAL INCOME OF THE COMPANY...!! 2)SINCE EBIT=Sales-Operating costs excluding depreciation and amortization SINCE THE SALES OF 2012 IS GREATER THAN IN 2011... HENCE EBIT IS LARGE VALUE/..!! 3)LARGE SALES LEADS TO LARGE TAXES.... HENCE LARGE DIVIDENTS..!! 4)RETAINED EARNINGS BECOMES ASSETS IN THE GLOBAL ACCOUNTING ISSUES... HENCE ONCE AGAIN THIS CREATES MORE TAX INTURN DIVIDENDS..!! 5)
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