4 This question refers to the proformas in Exhibit C of the 12 Step DCF class handout For Company B in year 1, show how all the values are derived in the Income Statement, Balance Sheet, and Other Information Do this in the same way we did it in class for Company A's year 1 PROJECTED INCOME STATEMENT Sales Operating Expenses Earnings Before Interest Taxes Interest on Debt 10 YEAR FINANCIAL STATEMENTS FOR A AND B (IN MILLIONS OF DOLLARS) 2 3 COMPANY B 5 78 9 133 75 143 11 153 13 163 85 175 32187 59 200 72 214 77 229 81 113 69 121 65 130 16 139 22 149 02 159 45 170 61 182 56 195 34 20 06 21 47 22 97 24 58 26 30 28 14 30 11 32 22 34 47 2 80 3 12 3 46 3 82 4 22 4 64 5 09 5 58 6 10 17 26 18 35 19 51 20 75 22 08 23 50 25 02 25 02 26 64 28 37 8 63 9 17 9 76 10 38 11 04 11 75 12 51 13 32 14 19 8 63 9 17 9 76 10 38 11 04 11 75 12 51 13 32 14 19 1 23 1 31 1 39 1 48 1 58 1 68 1 79 1 90 2 03 92 98 1 05 1 11 1 18 1 26 1 34 1 43 1 52 10 245 89 209 01 36 88 6 65 30 23 15 11 15 11 2 16 1 62 Earnings Before Taxes Income Taxes Net Income Earnings Per Share Dividends Per Share BALANCE SHEET Current Assets Fixed Assets Total Assets 27 19 73 94 101 12 38 97 62 16 101 12 29 53 78 15 107,68 43 23 64 45 102 68 32 03 82 66 114 68 47 80 66 89 114 69 34 71 87 48 122 19 52 71 69 48 122 19 37 58 92 64 130 22 57 98 72 24 130 22 40 654 3 93 98 17 104 08 138 81 148 01 63 63 69 70 75 18 78 31 138 81 148 01 47 44 110 40 157 84 76 20 81 64 157 84 51 20 117 16 168 37 83 18 85 19 168 37 55 22 124 40 179 63 90 66 8 8 97 179 63 Long Term Debt Shareholders Equity Total Equity Liabilities OTHER INFORMATION Depreciation Net Increase in Long Term Debt Dividends Paid Capital Expenditures Increase in Current Assets 7 00 3 97 6 47 10 94 2 19 7 397 82 4 26 4 57 6 88 7 32 11 61 12 32 2 34 2 50 8 27 4 91 7 78 13 09 2 68 8 75 5 27 8 28 13 91 2 87 9 26 5 65 8 81 14 69 3 07 9 82 6 06 9 38 15 73 3 28 10 41 6 51 9 99 16 73 3 51 11 04 6 98 10 64 17 81 3 76 11 72 7 48 11 34 18 96 4 02 FINANCIAL STATEMENT RATIOS 63 67 71 76 80 1 02 Long Term Debt to Shareholders Equity Times Interest Earned Return on Assets Return on Equity 98 5 65 6 89 6 64 6 24 7 17 09 14 85 6 07 08 16 89 5 91 08 16 6 43 08 15 93 5 78 08 16 09 09 08 08 5 54 08 17 14 15 15 17 12 Step DCF Proforma Exhibit C Company A, Year 1 Starting from Exhibit A and assumptions from Exhibit B INCOME STATEMENT Sales 100 1 15 115 Delta Sales 15 Op Exp 70 115 80 50 EBIT 30 115 34 50, or 115 80 50 34 50 Int 08 PREVIOUS Debt 08 25 2 EBT 34 50 2 32 50 Taxes 50 32 50 16 25 EAT 32 50 16 25 16 25 Dividends 5 16 25 8 125 Add to RE EAT Dividends 16 25 8 125 EPS 16 25 5 3 25 DPS 8 125 5 1 625 BALANCE SHEET CA 20 20 Delta Sales 20 20 15 20 3 23 FA 40 25 Delta Sales 40 25 15 40 3 75 43 75 TA CA FA 23 43 75 66 75 SE 35 Add to RE 35 8 125 43 125 Debt TA SE 66 75 43 125 23 625 Debt SE 23 625 43 125 66 75 OTHER INFORMATION Deprec 10 Previous FA 10 40 4 Net Increase in Debt 23 625 25 1 375 Dividends 5 16 25 8 125 Cap Ex FA (Previous FA Deprec) 43 75 (40 4) 43 75 30 7 75 Increase in CA 23 20 3 Using this same approach, you can verify all the numbers in for the remaining 9 years for Company A, and you can do the Proforma for Company B 4 This question refers to the proformas in Exhibit C of the 12 Step DCF class handout For Company B in year 1, show how all the values are derived in the Income Statement, Balance Sheet, and Other Information Do this in the same way we did it in class for Company A's year 1 PROJECTED INCOME STATEMENT Sales Operating Expenses Earnings Before Interest Taxes Interest on Debt 10 YEAR FINANCIAL STATEMENTS FOR A AND B (IN MILLIONS OF DOLLARS) 2 3 COMPANY B 5 78 9 133 75 143 11 153 13 163 85 175 32187 59 200 72 214 77 229 81 113 69 121 65 130 16 139 22 149 02 159 45 170 61 182 56 195 34 20 06 21 47 22 97 24 58 26 30 28 14 30 11 32 22 34 47 2 80 3 12 3 46 3 82 4 22 4 64 5 09 5 58 6 10 17 26 18 35 19 51 20 75 22 08 23 50 25 02 25 02 26 64 28 37 8 63 9 17 9 76 10 38 11 04 11 75 12 51 13 32 14 19 8 63 9 17 9 76 10 38 11 04 11 75 12 51 13 32 14 19 1 23 1 31 1 39 1 48 1 58 1 68 1 79 1 90 2 03 92 98 1 05 1 11 1 18 1 26 1 34 1 43 1 52 10 245 89 209 01 36 88 6 65 30 23 15 11 15 11 2 16 1 62 Earnings Before Taxes Income Taxes Net Income Earnings Per Share Dividends Per Share BALANCE SHEET Current Assets Fixed Assets Total Assets 27 19 73 94 101 12 38 97 62 16 101 12 29 53 78 15 107,68 43 23 64 45 102 68 32 03 82 66 114 68 47 80 66 89 114 69 34 71 87 48 122 19 52 71 69 48 122 19 37 58 92 64 130 22 57 98 72 24 130 22 40 654 3 93 98 17 104 08 138 81 148 01 63 63 69 70 75 18 78 31 138 81 148 01 47 44 110 40 157 84 76 20 81 64 157 84 51 20 117 16 168 37 83 18 85 19 168 37 55 22 124 40 179 63 90 66 8 8 97 179 63 Long Term Debt Shareholders Equity Total Equity Liabilities OTHER INFORMATION Depreciation Net Increase in Long Term Debt Dividends Paid Capital Expenditures Increase in Current Assets 7 00 3 97 6 47 10 94 2 19 7 397 82 4 26 4 57 6 88 7 32 11 61 12 32 2 34 2 50 8 27 4 91 7 78 13 09 2 68 8 75 5 27 8 28 13 91 2 87 9 26 5 65 8 81 14 69 3 07 9 82 6 06 9 38 15 73 3 28 10 41 6 51 9 99 16 73 3 51 11 04 6 98 10 64 17 81 3 76 11 72 7 48 11 34 18 96 4 02 FINANCIAL STATEMENT RATIOS 63 67 71 76 80 1 02 Long Term Debt to Shareholders Equity Times Interest Earned Return on Assets Return on Equity 98 5 65 6 89 6 64 6 24 7 17 09 14 85 6 07 08 16 89 5 91 08 16 6 43 08 15 93 5 78 08 16 09 09 08 08 5 54 08 17 14 15 15 17 12 Step DCF Proforma Exhibit C Company A, Year 1 Starting from Exhibit A and assumptions from Exhibit B INCOME STATEMENT Sales 100 1 15 115 Delta Sales 15 Op Exp 70 115 80 50 EBIT 30 115 34 50, or 115 80 50 34 50 Int 08 PREVIOUS Debt 08 25 2 EBT 34 50 2 32 50 Taxes 50 32 50 16 25 EAT 32 50 16 25 16 25 Dividends 5 16 25 8 125 Add to RE EAT Dividends 16 25 8 125 EPS 16 25 5 3 25 DPS 8 125 5 1 625 BALANCE SHEET CA 20 20 Delta Sales 20 20 15 20 3 23 FA 40 25 Delta Sales 40 25 15 40 3 75 43 75 TA CA FA 23 43 75 66 75 SE 35 Add to RE 35 8 125 43 125 Debt TA SE 66 75 43 125 23 625 Debt SE 23 625 43 125 66 75 OTHER INFORMATION Deprec 10 Previous FA 10 40 4 Net Increase in Debt 23 625 25 1 375 Dividends 5 16 25 8 125 Cap Ex FA (Previous FA Deprec) 43 75 (40 4) 43 75 30 7 75 Increase in CA 23 20 3 Using this same approach, you can verify all the numbers in for the remaining 9 years for Company A, and you can do the Proforma for Company B

Question

4  This question refers to the proformas in Exhibit C of the 12 Step DCF class handout  For Company B in year 1, show how all the values are derived in the Income Statement, Balance Sheet, and Other Information  Do this in the same way we did it in class for Company A's year 1  PROJECTED INCOME STATEMENT Sales Operating Expenses Earnings Before Interest   Taxes Interest on Debt 10 YEAR FINANCIAL STATEMENTS FOR A AND B (IN MILLIONS OF DOLLARS) 2 3 COMPANY B 5 78 9 133 75 143 11 153 13 163 85 175 32187 59 200 72 214 77 229 81 113 69 121 65 130 16 139 22 149 02 159 45 170 61 182 56 195 34 20 06 21 47 22 97 24 58 26 30 28 14 30 11 32 22 34 47 2 80 3 12 3 46 3 82 4 22 4  64 5 09 5 58 6 10 17 26 18 35 19 51 20 75 22 08 23 50 25 02 25 02 26 64 28 37 8 63 9 17 9 76 10 38 11 04 11 75 12 51 13 32 14 19 8 63 9 17 9 76 10 38 11 04 11 75 12 51 13 32 14 19 1 23 1 31 1 39 1 48 1 58 1  68 1 79 1 90 2 03  92  98 1 05 1 11 1 18 1 26 1 34 1 43 1 52 10 245 89 209 01 36 88 6 65 30 23 15 11 15 11 2 16 1 62 Earnings Before Taxes Income Taxes Net Income Earnings Per Share Dividends Per Share BALANCE SHEET Current Assets Fixed Assets Total Assets 27 19 73 94 101 12 38 97 62 16 101 12 29 53 78 15 107,68 43 23 64 45 102 68 32 03 82 66 114 68 47 80 66 89 114 69 34 71 87 48 122 19 52 71 69 48 122 19 37 58 92 64 130 22 57 98 72 24 130 22 40 654 3 93 98 17 104 08 138 81 148 01 63 63 69 70 75 18 78 31 138 81 148 01 47 44 110 40 157 84 76 20 81 64 157 84 51 20 117 16 168 37 83 18 85 19 168 37 55 22 124 40 179 63 90 66 8 8 97 179 63 Long Term Debt Shareholders Equity Total Equity   Liabilities OTHER INFORMATION Depreciation Net Increase in Long Term Debt Dividends Paid Capital Expenditures Increase in Current Assets 7 00 3 97 6 47 10 94 2 19 7 397 82 4 26 4 57 6 88 7 32 11 61 12 32 2 34 2 50 8 27 4 91 7 78 13 09 2 68 8 75 5 27 8 28 13 91 2 87 9 26 5 65 8 81 14 69 3 07 9 82 6 06 9 38 15 73 3 28 10 41 6 51 9 99 16 73 3 51 11 04 6 98 10 64 17 81 3 76 11 72 7 48 11 34 18 96 4 02 FINANCIAL STATEMENT RATIOS  63  67  71  76 80 1 02 Long Term Debt to Shareholders Equity Times Interest Earned Return on Assets Return on Equity  98 5 65 6 89 6 64 6 24 7 17  09  14  85 6 07  08 16  89 5 91  08 16 6 43  08 15  93 5 78  08 16  09  09  08  08 5 54  08 17 14 15 15 17 12 Step DCF Proforma  Exhibit C Company A, Year 1  Starting from Exhibit A and assumptions from Exhibit B  INCOME STATEMENT Sales   100 1 15   115 Delta Sales   15 Op Exp    70 115   80 50 EBIT    30 115   34 50, or 115   80 50   34 50 Int    08  PREVIOUS Debt    08 25   2 EBT   34 50  2   32 50 Taxes    50 32 50   16 25 EAT   32 50   16 25   16 25 Dividends    5 16 25   8 125 Add to RE   EAT   Dividends   16 25   8 125 EPS   16 25 5   3 25 DPS   8 125 5   1 625 BALANCE SHEET CA   20  20  Delta Sales   20   20 15   20   3   23 FA   40   25 Delta Sales   40   25 15   40  3 75   43 75 TA   CA   FA   23   43 75   66 75 SE   35  Add to RE   35   8 125   43 125 Debt   TA SE   66 75  43 125   23 625 Debt   SE   23 625   43 125   66 75 OTHER INFORMATION Deprec    10  Previous FA    10 40   4 Net Increase in Debt   23 625   25    1 375 Dividends    5 16 25   8 125 Cap Ex   FA   (Previous FA   Deprec)   43 75  (40 4)   43 75  30   7 75 Increase in CA   23   20   3 Using this same approach, you can verify all the numbers in for the remaining 9 years for Company A, and you can do the Proforma for Company B  4  This question refers to the proformas in Exhibit C of the 12 Step DCF class handout  For Company B in year 1, show how all the values are derived in the Income Statement, Balance Sheet, and Other Information  Do this in the same way we did it in class for Company A's year 1  PROJECTED INCOME STATEMENT Sales Operating Expenses Earnings Before Interest   Taxes Interest on Debt 10 YEAR FINANCIAL STATEMENTS FOR A AND B (IN MILLIONS OF DOLLARS) 2 3 COMPANY B 5 78 9 133 75 143 11 153 13 163 85 175 32187 59 200 72 214 77 229 81 113 69 121 65 130 16 139 22 149 02 159 45 170 61 182 56 195 34 20 06 21 47 22 97 24 58 26 30 28 14 30 11 32 22 34 47 2 80 3 12 3 46 3 82 4 22 4  64 5 09 5 58 6 10 17 26 18 35 19 51 20 75 22 08 23 50 25 02 25 02 26 64 28 37 8 63 9 17 9 76 10 38 11 04 11 75 12 51 13 32 14 19 8 63 9 17 9 76 10 38 11 04 11 75 12 51 13 32 14 19 1 23 1 31 1 39 1 48 1 58 1  68 1 79 1 90 2 03  92  98 1 05 1 11 1 18 1 26 1 34 1 43 1 52 10 245 89 209 01 36 88 6 65 30 23 15 11 15 11 2 16 1 62 Earnings Before Taxes Income Taxes Net Income Earnings Per Share Dividends Per Share BALANCE SHEET Current Assets Fixed Assets Total Assets 27 19 73 94 101 12 38 97 62 16 101 12 29 53 78 15 107,68 43 23 64 45 102 68 32 03 82 66 114 68 47 80 66 89 114 69 34 71 87 48 122 19 52 71 69 48 122 19 37 58 92 64 130 22 57 98 72 24 130 22 40 654 3 93 98 17 104 08 138 81 148 01 63 63 69 70 75 18 78 31 138 81 148 01 47 44 110 40 157 84 76 20 81 64 157 84 51 20 117 16 168 37 83 18 85 19 168 37 55 22 124 40 179 63 90 66 8 8 97 179 63 Long Term Debt Shareholders Equity Total Equity   Liabilities OTHER INFORMATION Depreciation Net Increase in Long Term Debt Dividends Paid Capital Expenditures Increase in Current Assets 7 00 3 97 6 47 10 94 2 19 7 397 82 4 26 4 57 6 88 7 32 11 61 12 32 2 34 2 50 8 27 4 91 7 78 13 09 2 68 8 75 5 27 8 28 13 91 2 87 9 26 5 65 8 81 14 69 3 07 9 82 6 06 9 38 15 73 3 28 10 41 6 51 9 99 16 73 3 51 11 04 6 98 10 64 17 81 3 76 11 72 7 48 11 34 18 96 4 02 FINANCIAL STATEMENT RATIOS  63  67  71  76 80 1 02 Long Term Debt to Shareholders Equity Times Interest Earned Return on Assets Return on Equity  98 5 65 6 89 6 64 6 24 7 17  09  14  85 6 07  08 16  89 5 91  08 16 6 43  08 15  93 5 78  08 16  09  09  08  08 5 54  08 17 14 15 15 17 12 Step DCF Proforma  Exhibit C Company A, Year 1  Starting from Exhibit A and assumptions from Exhibit B  INCOME STATEMENT Sales   100 1 15   115 Delta Sales   15 Op Exp    70 115   80 50 EBIT    30 115   34 50, or 115   80 50   34 50 Int    08  PREVIOUS Debt    08 25   2 EBT   34 50  2   32 50 Taxes    50 32 50   16 25 EAT   32 50   16 25   16 25 Dividends    5 16 25   8 125 Add to RE   EAT   Dividends   16 25   8 125 EPS   16 25 5   3 25 DPS   8 125 5   1 625 BALANCE SHEET CA   20  20  Delta Sales   20   20 15   20   3   23 FA   40   25 Delta Sales   40   25 15   40  3 75   43 75 TA   CA   FA   23   43 75   66 75 SE   35  Add to RE   35   8 125   43 125 Debt   TA SE   66 75  43 125   23 625 Debt   SE   23 625   43 125   66 75 OTHER INFORMATION Deprec    10  Previous FA    10 40   4 Net Increase in Debt   23 625   25    1 375 Dividends    5 16 25   8 125 Cap Ex   FA   (Previous FA   Deprec)   43 75  (40 4)   43 75  30   7 75 Increase in CA   23   20   3 Using this same approach, you can verify all the numbers in for the remaining 9 years for Company A, and you can do the Proforma for Company B

Accepted Answer

The Answer is in the image, click to view ...

Question

4. This question refers to the proformas in Exhibit C of the 12 Step DCF class handout. For Company B in year 1, show how

Step by Step Solution

Step: 1

Get Instant Access to Expert-Tailored Solutions

Step: 2

Step: 3

Ace Your Homework with AI

Recommended Textbook for

The Principles And Practice Of Auditing

Students also viewed these Accounting questions

Question

Question

Question

Question

Question

Question

Question

Question

Question

Question

Question

Question

Question

Question