Answered step by step
Verified Expert Solution
Question
1 Approved Answer
help for a, b , c and d Question 3 WTC Berhad is expecting a 25 percent growth in sales next year by introducing its
help for a, b , c and d
Question 3 WTC Berhad is expecting a 25 percent growth in sales next year by introducing its latest Al Air Fryer". The management is concern about the organization's demand in raising additional funds for this sales growth. The growth of the sales will not expand its existing long-term financing and fixed assets amounts. The depreciation will remain the same using the straight-line method. The company will pay a similar amount of financial cost to the existing liabilities. The organization's current assets and current liabilities will vary with sales growth. The financial statement for the end of last year is shown below (1 year = 365 days) WTC Berhad WTC Berhad Profit and Loss Statement as at 30 September 2020 Balance Sheet as at 30 September 2020 0,000) (000) (000) Credit Sales 400,000 Cash in current a/c 10,000 Account Payable 50,000 Cost (300,000) Account Receivable 80,000 Accrued - Salary 3,000 Depreciation & Amortiztion (50,000) Raw Material 50,000 Accrued - Utilities 3,000 50,000 Semi-finished goods 30,000 20 years term loan 44,000 Interest expenses (10,000) Finished goods 70,000 Common Stock 240,000 Eamings before tax 40,000 Machinery 160,000 Retained Eamings 60,000 Corpota re tax (259) (10,000) Eamings available to shareholders 30,000 400,000 400,000 Dividend to shareholders 10,000 (a) You are required to develop a Pro-forma Income statement and balance sheet for WCT Berhad in identifying the additional financing needs for sales growth of 25 percent (10 marks) (b) Determine the following ratio for ABC Berhad based on the forecasted financial statement in (a): (0) Current ratio. (1 marks) (ii) Quick ratio. (1 marks) (iii) Total asset turnover. (1 marks) (iv) Average collection period. (1 marks) (C) Determine the percentage of growth on sales for WTC Berhad by depending solely on its internal funds. (3 marks) (d) Assist the management of WTC Berhad in determining the maximum growth rate on sales if solely depend on its internally generated funds and issuing debt to maintain a constant debt ratioStep by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started