Question

1 Approved Answer

Posted on Sep 11, 2024

2. Prepare Proformas for both the Income Statement and Balance Sheet of J Corp for the forecasted year. a. Assume 30% growth in sales. Use

2. Prepare Proformas for both the Income Statement and Balance Sheet of J Corp for the forecasted year. a. Assume 30% growth in sales. Use the Percentage Sales Method to prepare the statements. b. On the first pass calculate External or Additional Funds Needed. (Don't grow Notes Payable) c. Do a second pass on the Proforma Statements incorporating financing feedback effects. Assume J Corp wants to raise capital by the following percentages. Long Term Debt 60% and Common Stock 40% Interest Rate = 10% Stock Sells for $555 per share Dividend per share = $1.00 image text in transcribed

ASSETS Cash & Equiv Acct Receiv Inventories Curr Assets Plant & Equip Accum Depr Net Plant & Equip TOTAL ASSETS LIABILITIES Accounts Payable Notes Payable Accruals Curr Liab Long Term Debt EQUITY Common Stock Retained Earnings TOTAL EQUITY TOTAL LIAB & EQ BOOK VALUE J Corporation FINANCIAL STATEMENTS Balance Sheet ($ millions) Actual 0 $ 27,000 $ 25,501 45,005 42,170 12.600 12.666 84,605 88,965 59,267 29,698 5,675 $ 1,010 8,002 14,687 Year Ago $ 114,303 $ 114,675 19,683 20,254 59,679 79,933 80,337 89,650 55,312 34,338 7,920 1,244 7,440 16,604 20,000 35,871 42,200 78,071 $ 114,303 $ 114,675 BOOK VALUE Sales CGS Gross Profit SGA Depr EBIT Interest EBT Taxes Net Income Dividends Add to RE 25% Outstanding Shares Price Per Share Income Statement ($ million) Inv Turn DSO Asset Turn Debt Ratio TIE Actual Year Ago $ 145,000 $ 138,284 74.800 69.450 68,834 40,500 8,250 70,200 40,200 3,955 26,045 2,010 24,035 6,009 18,026 $ 20,084 1,247 $ $ Curr Ratio Quick Ratio Profit Margin ROA ROE P/E MV/BV EM 547 17,479 547 555 $ 18,837 4,709 14,128 547 13,581 547 402 Peer Group Financial Ratios Actual 0 3.3 2.4 10.5 x 105 Days 1.23 x 51.6% 5.3 x 6.3% 7.88% 16.31% 17 x 3.1 x 2.0 x Sales CGS Gross Profit SGA Depr EBIT Interest EBT Taxes Net Income Dividends Add to RE ASSETS Cash & Equiv Acct Receiv Inventories 25% Curr Assets Plant & Equip Accum Depr Net Plant & Equip TOTAL ASSETS LIABILITIES Accounts Payable Notes Payable Accruals Curr Liab Long Term Debt Actual $ 145,000 74.800 70,200 40,200 3.955 $ $ 26,045 2,010 24,035 6.009 18,026 Actual 0 547 17,479 $ 27,000 45,005 12,600 84,605 88,965 59,267 29,698 $ 114,303 5,675 1,010 8,002 14,687 19,683 Pro Forma 1.3 1.3 1.3 Forecast 1st Pass 2,010 Forecast 1st Pass 1,010 2nd Pass 2nd Pass ASSETS Cash & Equiv Acct Receiv Inventories Curr Assets Plant & Equip Accum Depr Net Plant & Equip TOTAL ASSETS LIABILITIES Accounts Payable Notes Payable Accruals Curr Liab Long Term Debt EQUITY Common Stock Retained Earnings TOTAL EQUITY 1,010 TOTAL LIAB & EQ Actual 0 $ 27,000 45,005 12.600 84,605 88,965 59.267 29,698 $ 114,303 AFN $ 5,675 1,010 8,002 14,687 19,683 20.254 59,679 79,933 $ 114,303 Forecast 1st Pass 1,010 2nd Pass 1,010 ASSETS Cash & Equiv Acct Receiv Inventories Curr Assets Plant & Equip Accum Depr Net Plant & Equip TOTAL ASSETS LIABILITIES Accounts Payable Notes Payable Accruals Curr Liab Long Term Debt EQUITY Common Stock Retained Earnings TOTAL EQUITY TOTAL LIAB & EQ BOOK VALUE J Corporation FINANCIAL STATEMENTS Balance Sheet ($ millions) Actual 0 $ 27,000 $ 25,501 45,005 42,170 12.600 12.666 84,605 88,965 59,267 29,698 5,675 $ 1,010 8,002 14,687 Year Ago $ 114,303 $ 114,675 19,683 20,254 59,679 79,933 80,337 89,650 55,312 34,338 7,920 1,244 7,440 16,604 20,000 35,871 42,200 78,071 $ 114,303 $ 114,675 BOOK VALUE Sales CGS Gross Profit SGA Depr EBIT Interest EBT Taxes Net Income Dividends Add to RE 25% Outstanding Shares Price Per Share Income Statement ($ million) Inv Turn DSO Asset Turn Debt Ratio TIE Actual Year Ago $ 145,000 $ 138,284 74.800 69.450 68,834 40,500 8,250 70,200 40,200 3,955 26,045 2,010 24,035 6,009 18,026 $ 20,084 1,247 $ $ Curr Ratio Quick Ratio Profit Margin ROA ROE P/E MV/BV EM 547 17,479 547 555 $ 18,837 4,709 14,128 547 13,581 547 402 Peer Group Financial Ratios Actual 0 3.3 2.4 10.5 x 105 Days 1.23 x 51.6% 5.3 x 6.3% 7.88% 16.31% 17 x 3.1 x 2.0 x Sales CGS Gross Profit SGA Depr EBIT Interest EBT Taxes Net Income Dividends Add to RE ASSETS Cash & Equiv Acct Receiv Inventories 25% Curr Assets Plant & Equip Accum Depr Net Plant & Equip TOTAL ASSETS LIABILITIES Accounts Payable Notes Payable Accruals Curr Liab Long Term Debt Actual $ 145,000 74.800 70,200 40,200 3.955 $ $ 26,045 2,010 24,035 6.009 18,026 Actual 0 547 17,479 $ 27,000 45,005 12,600 84,605 88,965 59,267 29,698 $ 114,303 5,675 1,010 8,002 14,687 19,683 Pro Forma 1.3 1.3 1.3 Forecast 1st Pass 2,010 Forecast 1st Pass 1,010 2nd Pass 2nd Pass ASSETS Cash & Equiv Acct Receiv Inventories Curr Assets Plant & Equip Accum Depr Net Plant & Equip TOTAL ASSETS LIABILITIES Accounts Payable Notes Payable Accruals Curr Liab Long Term Debt EQUITY Common Stock Retained Earnings TOTAL EQUITY 1,010 TOTAL LIAB & EQ Actual 0 $ 27,000 45,005 12.600 84,605 88,965 59.267 29,698 $ 114,303 AFN $ 5,675 1,010 8,002 14,687 19,683 20.254 59,679 79,933 $ 114,303 Forecast 1st Pass 1,010 2nd Pass 1,010