forecasting financial statements

Excel Activity: Forecasting Financial Statements Morrissey Technologies Inc.'s 2021 financial statements are shown here. Morrissey Technoloaies Inc.: Balance Sheet as of December 31. 2021 Morrissey Technologles Inc.t Income Statement for December 31,2021 Suppose thot in 2022, sales increase by 14% over 2021 sales, The firm currenty has 100,000 shares outstanding. It expects to maintain its 2021 dividend payout ratio and believes that its assets should grow at the same rate as sales. The firm has no excess capacity. Howevec, the firm would like to reduce its operating costs/sales ratio to 90.5% and increase its total liabilities-to-assets ratio to 30%5. (It believos its Mabilities-to-assets ratio currently is too low Suppose that in 2022, sales increase by 14% over 2021 sales. The firm currently has 100,000 shares outstanding. It expects to maintain its 2021 dividend payout ratio and believes that its assets should grow at the same rate as sales. The firm has no excess capacity. However, the firm would like to reduce its operating costs/sales ratio to 90.5% and increase its total liabilities-to-assets ratio to 30%. (It believes its liabilities-to-assets ratio currently is too low relative to the industry average.) The firm will raise 30% of the 2022 forecasted interest-bearing debt as notes payable, and it will issue long-term bonds for the remainder. The firm forecasts that its before-tax cost of debt (which includes both short- and long-term debt) is 13.5\%. Assume that any common stock issuances or repurchases can be made at the firm's current stock price of $81. 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. Downladd spreadsheet Forecasting Financial Statements =035 at3 x xis a. Construct the forecasted financial statements assuming that these changes are made. What are the firm's forecasted notes payable and long-term debt balances? What is the forecasted addition to retained earnings? Round your answers to the nearest cent. b. If the profit margin remains at 3.75% and the dividend payout ratio remains at 40%6, at what growth rate in sales will the additional financing requirementy be exactly zero? In other words, what is the firm's sustainable growth rate? (Hinti Set AFN equal to zero and solve for g.) Round your answer to two decimal places