IncomeStatement Balance Sheet
Sales$9,500 Current assets$4,200 Current liabilities $2,700
Costs6,700 Fixed assets9,400 Long-tern debt 4,260
Taxable income $2,800 Equity 6,640
Taxes (24% ) 672 Total $13,600 Total $ 13,600
Assets, costs, and current liabilities are proportional toassets. Long-term debt and equity are not. The company maintains aconstant 35 percent dividend payout ratio. As with every other firmin its industry, next year's sales are projected to increase byexactly 18 percent.
What is the external financing needed?
IncomeStatement Balance Sheet
Sales$9,500 Current assets$4,200 Current liabilities $2,700
Costs6,700 Fixed assets9,400 Long-tern debt 4,260
Taxable income $2,800 Equity 6,640
Taxes (24% ) 672 Total $13,600 Total $ 13,600
Assets, costs, and current liabilities are proportional toassets. Long-term debt and equity are not. The company maintains aconstant 35 percent dividend payout ratio. As with every other firmin its industry, next year's sales are projected to increase byexactly 18 percent.
What is the external financing needed?
Related questions
| The most recent financial statements for Cornwall, Inc., are shown here: |
| Income Statement | Balance Sheet | ||||||||||
| Sales | $ | 6,500 | Current assets | $ | 3,200 | Current liabilities | $ | 2,200 | |||
| Costs | 5,200 | Fixed assets | 10,200 | Long-term debt | 3,750 | ||||||
| Taxable income | $ | 1,300 | Equity | 7,450 | |||||||
| Taxes (34%) | 442 | Total | $ | 13,400 | Total | $ | 13,400 | ||||
| Net income | $ | 858 | |||||||||
| Assets, costs, and current liabilities are proportional to sales. Long-term debt and equity are not. The company maintains a constant 20 percent dividend payout ratio. As with every other firm in its industry, next yearĆ¢ĀĀs sales are projected to increase by exactly 15 percent. |
| What is the external financing needed? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) |
| Answer for External financing needed? |
| The most recent financial statements for Xporter, Inc., are shown here: |
| Income Statement | Balance Sheet | ||||||||||
| Sales | $ | 6,900 | Current assets | $ | 3,600 | Current liabilities | $ | 2,200 | |||
| Costs | 5,400 | Fixed assets | 10,200 | Long-term debt | 3,750 | ||||||
| Taxable income | $ | 1,500 | Equity | 7,850 | |||||||
| Taxes (34%) | 510 | Total | $ | 13,800 | Total | $ | 13,800 | ||||
| Net income | $ | 990 | |||||||||
| Assets, costs, and current liabilities are proportional to sales. Long-term debt and equity are not. The company maintains a constant 40 percent dividend payout ratio. As with every other firm in its industry, next year |
| Consider the following income statement for the Heir Jordan Corporation: |
Ā Ā
| HEIR JORDAN CORPORATION Income Statement |
|||||||
| Ā Ā Sales | Ā | Ā | Ā | Ā | $ | 43,500 | Ā |
| Ā Ā Costs | Ā | Ā | Ā | Ā | Ā | 34,100 | Ā |
| Ā | Ā | Ā | Ā | Ā | Ā | ||
| Ā Ā Taxable income | Ā | Ā | Ā | Ā | $ | 9,400 | Ā |
| Ā Ā Taxes (24%) | Ā | Ā | Ā | Ā | Ā | 2,256 | Ā |
| Ā | Ā | Ā | Ā | Ā | Ā | ||
| Ā Ā Net income | Ā | Ā | Ā | Ā | $ | 7,144 | Ā |
| Ā | Ā | Ā | Ā | Ā |
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Ā |
| Ā Ā Ā Ā Ā Ā Dividends | $ | 2,515 | Ā | Ā | Ā | Ā | Ā |
| Ā Ā Ā Ā Ā Ā Addition to retained earnings | Ā | 4,629 | Ā | Ā | Ā | Ā | Ā |
Ā Ā
| The balance sheet for the Heir Jordan Corporation follows. |
Ā Ā
| HEIR JORDAN CORPORATION Balance Sheet |
|||||||
| Assets | Ā | Liabilities and Ownersā Equity | Ā | ||||
| Ā Ā Current assets | Ā | Ā | Ā | Ā Ā Current liabilities | Ā | Ā | Ā |
| Ā Ā Ā Ā Cash | $ | 2,550 | Ā | Ā Ā Ā Ā Accounts payable | $ | 2,400 | Ā |
| Ā Ā Ā Ā Accounts receivable | Ā | 3,800 | Ā | Ā Ā Ā Ā Notes payable | Ā | 5,100 | Ā |
| Ā | Ā | Ā | Ā | Ā | Ā | ||
| Ā Ā Ā Ā Inventory | Ā | 9,000 | Ā | Ā Ā Ā Ā Ā Ā Total | $ | 7,500 | Ā |
| Ā | Ā | Ā | Ā | ||||
| Ā Ā Ā Ā Ā Ā Total | $ | 15,350 | Ā | Ā Ā Long-term debt | $ | 24,000 | Ā |
| Ā | Ā | Ā | Ā | ||||
| Ā | Ā | Ā | Ā | Ā Ā Ownersā equity | Ā | Ā | Ā |
| Ā Ā Fixed assets | Ā | Ā | Ā | Ā Ā Ā Ā Common stock and paid-in surplus | $ | 16,000 | Ā |
| Ā Ā Ā Ā Net plant and equipment | $ | 38,000 | Ā | Ā Ā Ā Ā Retained earnings | Ā | 5,850 | Ā |
| Ā | Ā | Ā | Ā | ||||
| Ā | Ā | Ā | Ā | Ā Ā Ā Ā Ā Ā Total | $ | 21,850 | Ā |
| Ā | Ā | Ā | Ā | Ā | Ā | ||
| Ā Ā Total assets | $ | 53,350 | Ā | Ā Ā Total liabilities and ownersā equity | $ | 53,350 | Ā |
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Prepare a pro forma balance sheet, assuming an increase in sales of 15 percent, no new external debt or equity financing, and a constant payout ratio. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) |
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Calculate the EFN. (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) |
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Prepare a pro forma balance sheet, assuming an increase in sales of 15 percent, no new external debt or equity financing, and a constant payout ratio. (Do not round intermediate calculations and |
