Granite City County is Planning a 2.5 million expansions of its facilities. It needs to evaluate its options for financing the expansion. The company?s bank might not allow it to obtain more long term debt financing if its debt to equity ratio gets too high. Alternatively, common stockholders might be displeased if their ownership rights become diluted by issuing a substantial amount of preferred stock, or even additional common stock if it?s not issued on a pro ratio basis. A workbook has been started that contains a basic Balance sheet, solvency, and capital structure ratio data. Your task is to create scenarios for each financing alternative and prepare reports that Granite City Books bank ad management can use to compare the various financing alternatives. Complete the following.

1.Open the workbook named Grantie xlsx. Located in the Chapter 8 folder, and save it as Grantie City Expansion.xlsx in the same location.

2.In the options worksheet, apply appropriate names to the worksheet?s scenario changing cells as described in Table 8.5

Table 8.5 Descriptions of the changing cells

F9 Change in assets

F12 Change in long term debt

F14 Change in the dollar amount of common stock issued

F15 Change in the dollar amount of preferred stock issued

3.Create four scenarios in the Options worksheet using the scenario names and changing cell values shown in Table 8.6

Changing cells Long term debt financing Common stock financing Preferred stock fin. Balance Fin.

F9 2,500 2,500 2,500 2,500

F12 2,500 0 0 1,000

F14 0 2,500 0 750

F15 0 0 2,500 750

4.Based on the information in Table 8.7, apply appropriate names to worksheet?s results cells.

Table 8.7 Descriptions of the results cells

Cells Descriptions of the results of cells.

F13 Change in total liabilities

F17 Change in total equity

G21 Debt-to-equity ratio

G24 long-term-debt-to-common-equity ratio

G25 Preferred stock ratio

5.Create a professional-looking scenario summary report that shows all the results cells listed in Table 8.7

6.Create a professional-looking scenario PivotTable that shows the last three results cells listed in Table 8.7. Also generate a PivotChart based on the Pivot Table.

7.Save and Close the Granite City Expansion.xlsx workbook

Granite City Books Financing Options for Expansion As of December 31, 2013 (000's omitted) 2011 Summary Balance Sheet Total assets Current liabilities Long-term liabilities Total liabilities Common stock Preferred stock Retained earnings Total stockholders' equity Total liabilities & stockholders' equity Ratio Analysis Debt-to-equity ratio Long-term-debt to equity ratio Debt-to-common-equity ratio Long-term-debt to common equity Common-to-preferred equity Changes 2012 % Change $ 2,225.00 $ 2,500.00 $ 4,725.00 112.36% $ 278.00 $ (27.00) $ 251.00 550.00 2,500.00 3,050.00 828.00 2,473.00 3,301.00 1,000.00 1,000.00 -9.71% 454.55% 298.67% 0.00% 397.00 27.00 424.00 1,397.00 27.00 1,424.00 $ 2,225.00 $ 2,500.00 $ 4,725.00 6.80% 1.93% 112.36% 59.27% 39.37% 82.80% 55.00% 0.00% 231.81% 214.19% 330.10% 305.00% 0.00%