Problem 3-15 Free Cash Flow Financial information for Powell Panther Corporation

Question

Problem 3-15
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 $2,300.0 $2,000.0 Operating costs excluding depreciation and amortization 1,898.0 1,700.0 EBITDA $402.0 $300.0 Depreciation and amortization 62.0 56.0 Earnings before interest and taxes $340.0 $244.0   Interest 51.0 44.0 Earnings before taxes $289.0 $200.0   Taxes (40%) 115.6 80.0 Net income $173.4
$120.0
Common dividends $156.0
$96.0

Explanation / Answer

free cash flow =Net income
+ Depreciation/Amortization
- Change in Working Capital
- Capital Expenditure

free cash flow =173.4 + 62 -(406-382) =$211,400,000

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