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Hello, Could help me with this assignment? Thank you Excel Activity: Forecasting Financial Statements Morrissey Technologies Inc.'s 2021 financial statements are shown here. b. If
Hello, Could help me with this assignment? Thank you
Excel Activity: Forecasting Financial Statements Morrissey Technologies Inc.'s 2021 financial statements are shown here. b. If the profit margin remains at 5.00% and the dividend payout ratio remains at 60%, at what growth rate in sales will the additional financing requirements be exactly zero? In other words, what is the firm's sustainable growth rate? (Hint: Set AFN equal to zero and solve for g.) Round your answer to two decimal places. Suppose that in 2022 , sales increase by 15% 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 89.5% and increase its total liabilities-to-assets ratio to 35%. (It believes its liabilities-to-assets ratio currently is too low relative to the industry average.) The firm will raise 40% 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 $58. 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. Assets Cash Receivables Inventories Total current assets Fixed assets Total assets Liabilities and Equity Accounts payable Accrued liabilities Notes payable Total current liabilities Long-term debt Total liabilities Common stock Retained earningsStep by Step Solution
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