Finance

The Owl Corporation is planning for 20x2. The firm expects to have the following financial result in 20x1 ($000). INCOME STATEMENT Revenue COGS Gross Margin Expenses EBIT Interest EBT Income tax Net Income $43,435 12,382 $31,053 15,324 $15,729 $ 1,591 $14,138 5,655 $ 8,483 100.0 28.5 71.5 35.3 36.2 3.7 32.5 13.0 19.5 BALANCE SHEET Assets Liabilities & Equity s 1,783 883 Cash Accts. Rec. Inventory Curr. Assets Fixed Assets Gross Accum. Dep.(15,634) $1,008 Accts. Pay. 6,033 Accruals 2,476 $9,517 Curr. Liab. s 2,666 Capital $11,527 8,616 $20,143 $22,809 $28,926 Debt Equity $13,292 $22,809 Total L & E Total Assets Management has made the following planning assumptions Income Statement Revenue will grow by 10%. The cost ratio will improve to 36% of revenues. * Expenses will be held to 49% of revenues. Balance Sheet . The year end cash balance will be $1.8 million. The ACP will improve to 40 days from the current 50. . Inventory turnover will improve to 9X from 5X. . Trade payables will continue to be paid in 60 days. . New capital spending will be $5 million