Allen Products, Inc. wants to project their earnings and income for 2020. Allen's income statement for the most recent year follows: Allen Products Inc. Income Statement For the Year Ended December 31, 2019 Sales Revenue $97,500 Less: Cost of Goods Sold 41,875 Gross Profits (Margin) $55,625 Less: Operating Expenses 24,375 Operating Profits (Margin) (EBIT) $31,250 Less: Interest Expense 3,000 Net profits before tax (EBT) $28,250 Less: Taxes (rate = 35%). 9,888 Net Profits after taxes (EAT, net income, net $18,362 margin) 1. Use the percent of sales method, the income statement for December 31, 2019, and the sales revenue estimate of $107,250 to develop a pro forma income statement for the coming year. Allen Products plans to pay a 50% dividend in 2020, which is the same payout as 2019. Allen Products, Inc. wants to project their earnings and income for 2020. Allen's income statement for the most recent year follows: Allen Products Inc. Income Statement For the Year Ended December 31, 2019 Sales Revenue $97,500 Less: Cost of Goods Sold 41,875 Gross Profits (Margin) $55,625 Less: Operating Expenses 24,375 Operating Profits (Margin) (EBIT) $31,250 Less: Interest Expense 3,000 Net profits before tax (EBT) $28,250 Less: Taxes (rate = 35%). 9,888 Net Profits after taxes (EAT, net income, net $18,362 margin) 1. Use the percent of sales method, the income statement for December 31, 2019, and the sales revenue estimate of $107,250 to develop a pro forma income statement for the coming year. Allen Products plans to pay a 50% dividend in 2020, which is the same payout as 2019. 2020 Calculations Allen Products Inc. Income Statement Sales Revenue Less: Cost of Goods Sold Gross Profits (Margin) Less: Operating Expenses Operating Profits (Margin) (EBIT) Less: Interest Expense Net profits before tax (EBT) Less: Taxes (rate = 35%) Net Profits after taxes (EAT, net income, net margin) Less: Dividends To Retained Earnings Allen Products has the following balance sheet for December 31, 2019: Current assets Net fixed assets $ 5,000 10,000 Accounts payable Accruals Notes Payable Long-term debt Common equity Retained Earnings Total $ 1,000 1,000 500 5,000 5,500 2,000 $15,000 Total assets $15,000 2. Fixed and current assets are fully utilized (full capacity). Determine the additional external funding requirement for next year using the balance sheet formula (i.e., what is your firm's AFN)? Current Assets Allen Products Pro forma Balance Sheet 2020 Accounts Payable Accruals Notes Payable Long-term Debt Common Equity Retained Earnings Totals Liabilities & OE Net fixed assets Total Assets AFN = Assets (Liabilities + Owner's Equity) = 3. Use the long AFN formula (calculation without using financial statements) to calculate AFN for Allen Products. AFN = (Ao* /S.)AS$ (*/S.) AS$ M.(S2)(1 Payouto) = Allen Products, Inc. wants to project their earnings and income for 2020. Allen's income statement for the most recent year follows: Allen Products Inc. Income Statement For the Year Ended December 31, 2019 Sales Revenue $97,500 Less: Cost of Goods Sold 41,875 Gross Profits (Margin) $55,625 Less: Operating Expenses 24,375 Operating Profits (Margin) (EBIT) $31,250 Less: Interest Expense 3,000 Net profits before tax (EBT) $28,250 Less: Taxes (rate = 35%). 9,888 Net Profits after taxes (EAT, net income, net $18,362 margin) 1. Use the percent of sales method, the income statement for December 31, 2019, and the sales revenue estimate of $107,250 to develop a pro forma income statement for the coming year. Allen Products plans to pay a 50% dividend in 2020, which is the same payout as 2019. Allen Products, Inc. wants to project their earnings and income for 2020. Allen's income statement for the most recent year follows: Allen Products Inc. Income Statement For the Year Ended December 31, 2019 Sales Revenue $97,500 Less: Cost of Goods Sold 41,875 Gross Profits (Margin) $55,625 Less: Operating Expenses 24,375 Operating Profits (Margin) (EBIT) $31,250 Less: Interest Expense 3,000 Net profits before tax (EBT) $28,250 Less: Taxes (rate = 35%). 9,888 Net Profits after taxes (EAT, net income, net $18,362 margin) 1. Use the percent of sales method, the income statement for December 31, 2019, and the sales revenue estimate of $107,250 to develop a pro forma income statement for the coming year. Allen Products plans to pay a 50% dividend in 2020, which is the same payout as 2019. 2020 Calculations Allen Products Inc. Income Statement Sales Revenue Less: Cost of Goods Sold Gross Profits (Margin) Less: Operating Expenses Operating Profits (Margin) (EBIT) Less: Interest Expense Net profits before tax (EBT) Less: Taxes (rate = 35%) Net Profits after taxes (EAT, net income, net margin) Less: Dividends To Retained Earnings Allen Products has the following balance sheet for December 31, 2019: Current assets Net fixed assets $ 5,000 10,000 Accounts payable Accruals Notes Payable Long-term debt Common equity Retained Earnings Total $ 1,000 1,000 500 5,000 5,500 2,000 $15,000 Total assets $15,000 2. Fixed and current assets are fully utilized (full capacity). Determine the additional external funding requirement for next year using the balance sheet formula (i.e., what is your firm's AFN)? Current Assets Allen Products Pro forma Balance Sheet 2020 Accounts Payable Accruals Notes Payable Long-term Debt Common Equity Retained Earnings Totals Liabilities & OE Net fixed assets Total Assets AFN = Assets (Liabilities + Owner's Equity) = 3. Use the long AFN formula (calculation without using financial statements) to calculate AFN for Allen Products. AFN = (Ao* /S.)AS$ (*/S.) AS$ M.(S2)(1 Payouto) =