Financial Statements

Begin with the partial model in the file Ch$06$ P$20$ Build a Model.xlsx$.$

The partial balance sheets of Britton String are shown here.

Britton String Corp.: Partial Balance Sheets as of December $31$

$($Millions of Dollars$)$

$20222021$

Assets

Cash and cash equivalents $ $66$ $ $54$

Short$-$term investments $5652$

Accounts receivable $105130$

Inventories $288210$

Total current assets $ $515$ $ $446$

Net fixed assets $300254$

Total assets $ $815$ $ $700$

Liabilities and Equity

Accounts payable $ $71$ $ $58$

Accruals $4250$

Notes payable $3034$

Total current liabilities $ $143$ $ $142$

Long$-$term debt $223190$

Total liabilities $ $366$ $ $332$

Common stock $?261$

Retained earnings $?107$

Total common equity $?$ $ $368$

Total liabilities and equity $?$ $ $700$

The data has been collected in the Microsoft Excel file below. Download the spreadsheet and perform the required analysis to answer the questions below. Do not round intermediate calculations. Enter your answers in millions. For example, an answer of $$1$ million should be entered as $1,$ not $1,000,000.$ Round your answers to the nearest whole number. Use a minus sign to enter negative values, if any.

Download spreadsheet Ch$06$ P$20$ Build a Model$-$e$53$c$60.$xlsx

Britton String Corp. manufactures specialty strings for musical instruments and tennis racquets. Its most recent sales were $$920$ million; operating costs $($excluding depreciation$)$ were equal to $85\%$ of sales; net fixed assets were $$300$ million; depreciation amounted to $11\%$ of net fixed assets; interest expenses were $$25$ million; the state$-$plus$-$federal corporate tax rate was $25\%$; and it paid $40\%$ of its net income out in dividends. Given this information, construct its income statement. Also calculate total dividends and the addition to retained earnings.

Britton String Corp.: Income Statement for Year Ending

December $31,2022($Millions of Dollars$)$

$2022$

Sales $ fill in the blank $2$

$920$

Operating costs excluding depreciation fill in the blank $3$

$782$

EBITDA $ fill in the blank $4$

$138$

Depreciation fill in the blank $5$

$33$

EBIT $ fill in the blank $6$

$105$

Interest expense fill in the blank $7$

$25$

EBT $ fill in the blank $8$

$80$

Taxes $(25\%)$ fill in the blank $9$

$20$

Net income $ fill in the blank $10$

$60$

Common dividends $ fill in the blank $11$

$24$

Addition to retained earnings $ fill in the blank $12$

$36$

Britton issued $$45$ million of new common stock in the most recent year. Using this information and the results from part a$,$ fill in the missing values for common stock, retained earnings, total common equity, and total liabilities and equity.

Britton String Corp.: Partial Balance Sheet as of December $31$

$($Millions of Dollars$)$

$2022$

Common stock $ fill in the blank $13$

$306$

Retained earnings fill in the blank $14$

$143$

Total common equity $ fill in the blank $15$

$449$

Total liabilities and equity $ fill in the blank $16$

$815$

Construct the statement of cash flows for $2022.$

Britton String Corp.: Statement of Cash Flows for $2022$

$($Millions of Dollars$)$

$2022$

Operating Activities

Net income $ fill in the blank $17$

$60$

Noncash adjustments

Depreciation fill in the blank $18$

$33$

Working capital adjustments

Due to change in accounts receivable fill in the blank $19$

$25$

Due to change in inventories fill in the blank $20$

Due to change in accounts payable fill in the blank $21$

Due to change in accruals fill in the blank $22$

Net cash provided $($used$)$ by operating activities $ fill in the blank $23$

Investing Activities

Cash used to acquire fixed assets $ fill in the blank $24$

Due to change in short$-$term investments fill in the blank $25$

Net cash provided $($used$)$ by investing activities $ fill in the blank $26$

Financing Activities

Due to change in notes payable $ fill in the blank $27$

Due to change in long$-$term debt fill in the blank $28$

Due to change in common stock fill in the blank $29$

Payment of common dividends fill in the blank $30$

Net cash provided $($used$)$ by financing activities $ fill in the blank $31$

Summary

Net increase$/$decrease in cash $ fill in the blank $32$

Cash at the beginning of the year fill in the blank $33$

Cash at the end of the year $ fill in the blank $34$