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Can you please write down the steps on paper instead of excel? A firm has the following balance sheet and income statement (in millions of
Can you please write down the steps on paper instead of excel?
A firm has the following balance sheet and income statement (in millions of dollars): Balance Sheet Operating Cash Receivables Inventories Plant and equipment Operating liabilities Long-term debt 4 29 138 942 1113 288 695 983 130 1113 Stockholders' equity Income Statement Revenues Operating expenses Operating income Interest expense Income before tax Income taxes Income after tax 908 817 91 55 36 13 23 The long-term debt is 8 percent coupon debt maturing in five years. The statutory tax rate is 38 percent. Prepare pro forma financial statements for the next five years assuming that sales are expected to decline by 4 percent per year, and operating profit margin expected to decline to 2 percent. With some asserts inflexible, asset turnovers are expected to decline to 0.98. Also, forecast cash available for debt service and the debt service requirement. Assume that the firm pays no dividends. Use beginning balance sheet numbers in denominators for ratios. Show details of all calculationsStep by Step Solution
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