Write out your answers completely. For example, 25 million should be entered as 25,000,000.

1. What was net operating working capital for 2015 and 2016? 2015: $ 2016: $

2. What was the 2016 free cash flow? $

3. How would you explain the large increase in 2016 dividends?

A. The large increase in net income from 2015 to 2016 explains the large increase in 2016 dividends

B. The large increase in EBIT from 2015 to 2016 explains the large increase in 2016 dividends.

C. The large increase in sales from 2015 to 2016 explains the large increase in 2016 dividends.

D. The large increase in retained earnings from 2015 to 2016 explains the large increase in 2016 dividends.

E. The large increase in free cash flow from 2015 to 2016 explains the large increase in 2016 dividends.

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Financial information for Powell Panther Corporation is shown below:

Powell Panther Corporation: Income Statements for Year Ending December 31 (Millions of Dollars)

	2016	2015
Sales	$1,430.0	$1,300.0
Operating costs excluding depreciation and amortization	1,180.0	1,105.0
EBITDA	$250.0	$195.0
Depreciation and amortization	34.0	30.0
Earnings before interest and taxes (EBIT)	$216.0	$165.0
Interest	32.0	29.0
Earnings before taxes (EBT)	$184.0	$136.0
Taxes (40%)	73.6	54.4
Net income	$110.4	$81.6
Common dividends	$99.0	$65.0

Powell Panther Corporation: Balance Sheets as of December 31 (Millions of Dollars)

	2016	2015
Assets
Cash and equivalents	$23.0	$18.0
Accounts receivable	179.0	156.0
Inventories	254.0	195.0
Total current assets	$456.0	$369.0
Net plant and equipment	344.0	299.0
Total assets	$800.0	$668.0
Liabilities and Equity
Accounts payable	$163.0	$130.0
Accruals	57.0	52.0
Notes payable	29.0	26.0
Total current liabilities	$249.0	$208.0
Long-term bonds	286.0	260.0
Total liabilities	$535.0	$468.0
Common stock	228.6	175.0
Retained earnings	36.4	25.0
Common equity	$265.0	$200.0
Total liabilities and equity	$800.0	$668.0