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I was able to figure out the first portion of the problem but I'm looking for step by step solutions to solving for the EFN
I was able to figure out the first portion of the problem but I'm looking for step by step solutions to solving for the EFN with given information
The most recent financial statements for Crosby, Inc., follow. Interest expense will remain constant; the tax rate and the dividend payout rate will also remain constant. Costs, other expenses, current assets, fixed assets, and accounts payable increase spontaneously with sales. Assume the firm is operating at full capacity and the debt- equity ratio is held constant. CROSBY, INC. 2017 Income Statement Sales Costs Other expenses $772,000 628,000 33,500 Earnings before interest and taxes Interest paid $ 110,500 17,600 Taxable income Taxes (24%) $ 92.900 22,296 Net income $ 70,604 Dividends Addition to retained earnings $ 31,740 38,864 CROSBY, INC. Balance Sheet as of December 31, 2017 Assets Liabilities and Owners' Equity Current assets Current liabilities Cash $ 26,140 Accounts payable $ 65,000 Accounts receivable 35,650 Notes payable 20,300 Inventory 72,230 Total $ 85,300 Total $ 134,020 Long-term debt $ 120,000 $115.000 Fixed assets Net plant and equipment Owners' equity Common stock and paid-in surplus Retained earnings $229,000 42,720 Total $ 157,720 Total liabilities and owners Total assets $363,020 $363,020 equity Complete the pro forma income statements below. (Do not round intermediate calculations. Round your answers to the nearest whole dollar amount.) Pro Forma Income Statement Sales Costs Other expenses EBIT Interest paid Taxable income Taxes (24%) Net income Dividends Add to RE 10% Sales Growth 15% Sales Growth 40% Sales Growth $ 849,200 $ 887,800 $ 1,080,800 690.800 722,200 879,200 36,850 38,525 46,900 121,550 $ 127,075 $ 154,700 17,600 17,600 17,600 103,950 $ 109,475 $ 137,100 24,948 26,2741 32,904 79,002 $ 83,201$ 104,1961 $ 35,511 $ 37,399 $ 46,836 43,4911 45,802 57,360 Calculate the EFN for 10, 15 and 40 percent growth rates. (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answers to the nearest whole dollar amount.) 10% 15% 40%Step by Step Solution
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