$ Ch 03- End-of-Chapter Problems - Financial Statements, Cash Flow, and Taxes X Financial information for Powell Panther Corporation is shown below: Powell Panther Corporation: Income Statements for Year Ending December 31 (millions of dollars) 2021 2020 Sales $ 2,040.0 $ 1,700.0 Operating costs excluding depreciation 1,530.0 1.445.0 and amortization EBITDA $ 510.0 $ 255.0 Depreciation and amortization 57.0 49.0 Earnings before interest and taxes $ 453.0 206.0 (EBIT) (EBIT) Interest 44.9 37.4 Earnings before taxes (EBT) $ 408.1 $ 168.6 Taxes (25%) 163.2 67.4 Net Income 244.9 $ 101.2 Common dividends 220.4 $ 81.0 Powell Panther Corporation: Balance Sheets as of December 31 (millions of dollars) 2021 2020 Assets Cash and equivalents $ $ 28.0 $ $ 22.0 Accounts receivable 243.0 187.0 Inventories 464.0 357.0 Total current assets $ 735.0 $ 566.0 Net plant and equipment 567.0 493.0 Total assets $1,302,0 $1,059.0 ..... Liabilities and Equity Accounts payable $ 187.0 $ 170.0 Accruals 168.0 153.0 40.8 34.0 Total current liabilities Focal $ 395.8 $ 357.0 Long-term bonds 408. 408,0 340.0 Total liabilities $ 803.8 $ 697.0 Common stock 443.4 331.7 int . Retained earnings 54.8 30.3 Common equity $ 498.2 $ 362.0 Total liabilities and equity $1,302.0 $1,059.0 Write out your answers completely. For example, 25 million should be entered as 25,000,000. Round your answers to the nearest dollar, if necessary. Negative values, if any, should be indicated by a minus sign. a. What was net operating working capital for 2020 and 2021? Assume the firm has no excess cash. Notes payable Stock 2020: $ 2021: $ b. What was the 2021 free cash flow? $ f. Assume that the firm's stock price is $21 per share and that at year-end 2021 the firm has 10 million shares outstanding. What is the firm's MVA at year-end 2021? $ thousand Laiho Industries's 2020 and 2021 balance sheets (In thousands of dollars) are shown. Lalho Industries: Balance Sheets as of December 31 (thousands of dollars) 2021 2020 Cash $110.188 $ 89,675 Accounts receivable 101,070 84,685 Inventories 36,886 33,866 Tatal current assets $248,144 $208,226 Net fixed assets 66,750 42.706 Total assets $ $250,932 $314.894 Accounts payable $ 30,50D Accruals 28,549 Notes payable 14,926 Total current liabilities $ 73,975 Long-term debt 76,221 Total liabilities $150, 196 Common stock 100,500 Retained earnings 64.198 Total common equity $164,698 Tatal liabilities and equity $314,894 $ 22,930 21,705 12,716 $ 57,352 62,421 $120,173 88,000 42,759 $130,759 $ $250,932 a. Sales for 2021 were $474,650,000, and EBITDA was 16% of sales. Furthermore, depreciation and amortization were 17% of net fixed assets, interest was $9,359,000, the corporate tax rate was 25%, and Laiho pays 48.25% of its net income as dividends. Given this information, construct the firm's 2021 income statement Laiho Industries: Income Statement for Year Ending December 31, 2021 (thousands of dollars) 2021 Sales $ Operating costs excluding depreciation and amortization EBITDA $ Depreciation and amortization EBIT $ Interest EBT $ Taxes (25%) Net Income $ Common dividends Addition to retained earnings $ $ b. Construct the statement of stockholders' equity for the year ending December 31, 2021, and the 2021 statement of cash flows. Hint: The difference in accumulated depreciation from one year to the next is the annual depreciation expense for the year. Laiho Industries: Statement of Stockholders' Equity, December 31, 2021 (thousands of dollars) Total Retained Common Stock Stockholders' Earnings Equity Balances, December $ $ $ 31, 2020 Common stock issue 2021 Net income Cash dividends Addition to retained camings Balances, December 31, 2021 $ $ Laiho Industries: Statement of Cash Flows for 2021 (thousands of dollars) 2021 Laiho Industries: Statement of Cash Flows for : 2021 (thousands of dollars) 2021 Operating Activities Not income $ Depreciation and amortization Increase in accounts payable Increase in accruals Increase in accounts receivable Increase in inventories Net cash provided by operating activities 5 Investing Activities Additions to property, plant, and , $ equipment Net cash used in investing activities $ Financing Activities Increase in notes payable S Increase in long-term debt Increase in common stock Payment of common dividends Net cash provided by financing activities S Summary Net increase/decrease in cash s Cash at the beginning of the year Cash at the end of the year $ Calculate 2020 and 2021 net operating working capital (NOWC) and 2021 free cash flow (FCF). Assume the firm has no excess cash. NOWC2020: $ thousand NOWC2021: $ thousand FCF2021: $ thousand . If Laiho increased its dividend payout ratio, what effect would this have on corporate taxes paid? What effect would this have on taxes paid by the company's shareholders? If Laiho Increased its dividend payout ratio, the firm would pay corporate taxes and the company's shareholders would pay + taxes on the dividends they would receive. Assume that the firm's after-tax cost of capital is 10.5%. What is the firm's 2021 EVA? $ thousand f. Assume that the firm's stock price is $21 per share and that at year-end 2021 the firm has 10 million shares outstanding. What is the firm's MVA at year-end 2021? thousand