Question
Here are the abbreviated financial statements for Planners Peanuts: INCOME STATEMENT, 2022 Sales $ 2,000 Cost 1,500 Net income $ 500 BALANCE SHEET, YEAR-END 2021
Here are the abbreviated financial statements for Planners Peanuts:
| INCOME STATEMENT, 2022 | |
| Sales | $ 2,000 |
|---|---|
| Cost | 1,500 |
| Net income | $ 500 |
| BALANCE SHEET, YEAR-END | |||||
| 2021 | 2022 | 2021 | 2022 | ||
|---|---|---|---|---|---|
| Assets | $ 2,500 | $ 3,000 | Debt | $ 833 | $ 1,000 |
| Equity | 1,667 | 2,000 | |||
| Total | $ 2,500 | $ 3,000 | Total | $ 2,500 | $ 3,000 |
If sales increase by 20% in 2023 and the company uses a strict percentage of sales planning model (meaning that all items on the income and balance sheet also increase by 20%), what must be the balancing item?
What will be the value of this balancing item?
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Applied Conic Finance
Authors: Dilip Madan, Wim Schoutens
1st Edition
1107151694, 978-1107151697
