Re boot Computers makes bulk purchases of small computers, stocks them in conveniently located warehouses, and ships them to its chain of retail stores Re boot 's balance sheet as of December 31, 2012, is shown here (millions of dollars) Sales for 2012 were $280 million, while net income for the ye...

Re-boot Computers makes bulk purchases of small computers, stocks them in conveniently located warehouses, and ships them

Question:

Re-boot Computers makes bulk purchases of small computers, them in conveniently located warehouses, and ships them to its chain of retail stores. Re-boot's as of December 31, 2012, is shown here (millions of dollars).

Re-boot Computers makes bulk purchases of small computers, stocks them

Sales for 2012 were $280 million, while net income for the year was $10.5 million. Re-boot paid dividends of $4.2 million to common shareholders. The firm is operating at full capacity. Assume that all ratios remain constant.
a. If sales are projected to increase by $70 million, or 25%, during 2013, use the AFN equation to determine Re-boot's projected external capital requirements.
b. Using the AFN equation, determine Re-boot's self-supporting growth rate. That is, what is the maximum growth rate the firm can achieve without having to employ non-spontaneous external funds?
c. Construct Re-boot's pro forma balance sheet for December 31, 2013. Assume that all external capital requirements are met by bank loans and are reflected in notes payable. Assume the company's profit margin and dividend payout ratio remain constant?

Stocks
Stocks or shares are generally equity instruments that provide the largest source of raising funds in any public or private listed company's. The instruments are issued on a stock exchange from where a large number of general public who are willing... Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...