Tut05qfdf - July 2009 Strictly for course AB102 (2009)...

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July 2009 Strictly for course AB102 (2009) internal circulation only. Nanyang Business School AB102 Financial Management Tutorial 5: Analysis of Financial Statements (Common Questions) 1) (3-13) Free cash flow. Financial information for Powell Panther Corporation is shown here: Powell Panther Corporation: Income Statement for Year Ending December 31 (Millions of Dollars) 2005 2004 Sales $1,200.0 $1,000.0 Operating costs excluding Depreciation and amortization 1,020.0 850.0 EBITDA $180.0 $150.0 Depreciation and amortization 30.0 25.0 Earnings before interest and taxes $150.0 $125.0 Interest 21.7 20.2 Earnings before taxes $128.3 $104.8 Taxes (40%) 51.3 41.9 Net income $77.0 $62.9 Common dividends $60.5 $46.4 Powell Panther Corporation: Balance Sheet as of December 31 (Millions of Dollars) 2005 2004 Assets Cash and equivalents $12.0 $10.0 Accounts receivable 180.0 150.0 Inventories 180.0 200.0 Total current assets $372.0 $360.0 Net plant and equipment 300.0 250.0 Total assets $672.0 $610.0 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 debt $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 Total liabilities and equity $672.0 $610.0 a) What was the 2005 NOPAT? b) What were the 2004 and 2005 net operating working capital? c) What were the 2004 and 2005 total operating capital? d) What was the 2005 free cash flow? e) How would you explain the large increase in 2005 dividends? 2) (3-15) Financial statements, cash flow, and taxes . Laiho Industries’ 2004 and 2005 balance sheets (in thousands of dollars) are shown below: Page 1 of 4
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July 2009 Strictly for course AB102 (2009) internal circulation only. 2005
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This note was uploaded on 01/23/2011 for the course SSDWW 2324 taught by Professor Dfsf during the Spring '10 term at Nanzan.

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Tut05qfdf - July 2009 Strictly for course AB102 (2009)...

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