1. The Tellet Inc., expects a 20% increase in sales for the year 2020 over 2019 level. The Tellet is currently operating at full capacity and expects to increase the investment in both current and fixed assets in order to support the increase in forecasted sales. Answer the following questions using two financial statements below. INCOME STATEMENT FOR DECEMBER 31, 2019 BALANCE SHEET FOR DECEMBER 31, 2019 (THOUSANDS OF DOLLARS) (THOUSANDS OF DOLLARS) Assets Operating Expenses EBIT Interest Expenses EBT Taxes (40) Net Income $15.000 13.000 2.000 400 1.600 AR Inventories Total Current Assets $ 1.000 $ 2,000 $ 2.200 $ 5.200 S960 Fixed Assets, Net Total Assets S.100 $ 12.000 Cash Dividends (40%) Addition to retained Earnings $ 384 $ 576 Liabilities and Equities A/P Bank loan Accrued liabilities Total Current Liabilities Long term Debt Common Stock Retained Earnings Total Liabilities and Equities $ 1.600 $ 1.800 $ 1.200 5 $ 2.200 $ 2.400 $ 2.800 $ 12.000 A. Estimate the sustainable sales growth rate based on the financial data above. Calculate each component of the operating perfomance and financial policies B. Estimate the additional fund needed (AFN) for the year 2020 using the fomula or equation method. C. The Tellet expects the same 20% increase in sales for the years of 2021 and 2022. The Tellet is currently operating at full capacity and expects to increase the investment in both current and fixed assets in order to support the increase in forecasted sales. Construct the projected Income Statements, Balance Sheets, and Statement of Cash Flows for 2020, 2021, and 2022. D. What is the total amount of AFN needed over the years of 2020, 2021, and 2022? 1. The Tellet Inc., expects a 20% increase in sales for the year 2020 over 2019 level. The Tellet is currently operating at full capacity and expects to increase the investment in both current and fixed assets in order to support the increase in forecasted sales. Answer the following questions using two financial statements below. INCOME STATEMENT FOR DECEMBER 31, 2019 BALANCE SHEET FOR DECEMBER 31, 2019 (THOUSANDS OF DOLLARS) (THOUSANDS OF DOLLARS) Assets Operating Expenses EBIT Interest Expenses EBT Taxes (40) Net Income $15.000 13.000 2.000 400 1.600 AR Inventories Total Current Assets $ 1.000 $ 2,000 $ 2.200 $ 5.200 S960 Fixed Assets, Net Total Assets S.100 $ 12.000 Cash Dividends (40%) Addition to retained Earnings $ 384 $ 576 Liabilities and Equities A/P Bank loan Accrued liabilities Total Current Liabilities Long term Debt Common Stock Retained Earnings Total Liabilities and Equities $ 1.600 $ 1.800 $ 1.200 5 $ 2.200 $ 2.400 $ 2.800 $ 12.000 A. Estimate the sustainable sales growth rate based on the financial data above. Calculate each component of the operating perfomance and financial policies B. Estimate the additional fund needed (AFN) for the year 2020 using the fomula or equation method. C. The Tellet expects the same 20% increase in sales for the years of 2021 and 2022. The Tellet is currently operating at full capacity and expects to increase the investment in both current and fixed assets in order to support the increase in forecasted sales. Construct the projected Income Statements, Balance Sheets, and Statement of Cash Flows for 2020, 2021, and 2022. D. What is the total amount of AFN needed over the years of 2020, 2021, and 2022
