INDEX NUMBER.. SECTION A (35 Marks) (Attempt All in this Section) QUESTION A Sea Blue Ventures, a fishing company, has just approached you to help in determining their financial capacity to pursue the growth agenda they have for the incoming fiscal year of 2018. The CEO, Kofi Bentum, is of the view that that they can grow their 2017 revenue of $250,000 by a good 22% for the year 2018. Because they have not been very successful in raising external capital since they started business 5years ago, Kofi does not want to risk getting stuck in the middle; he wants to be sure that they can pull this growth agenda off smoothly. Your work is cut out for you: to advise Sea Blue Ventures on the feasibility or otherwise of their growth objective. Additional enquiries reveal that Sea Blue normally has net profit margin of 28%, out of which they usually retain 50% for future growth. In relation to this assignment, Sea Blue would also like you to recommend changes, if any, that must be made to their standard dividend policy. In other words, can and should they pay dividends in 2018 and if so how much? Using Table 1 and the information provided in the write-up above, fill in the questions that are topmost on the mind of Kofi Bentum, the CEO. Table 1 Balance sheet as at 31-Dec-17 Assets Cash & Marketable Securities 22,200 Accounts Receivable 34,100 Inventories 82,000 Total Current Assets 138,300 Fixed Assets 270,000 Total Assets 408,300 Liabilities and Stockholders' Equity C Account Payable 62,000 Notes Payable 13,000 Total Current Liabilities 75,000 Long-term Debt 150,000 Common Stock 110,200 Retained Earnings 73,100 Total Liabilities & Stockholders' 408,300 Equity Fill Bentum in on the 2018 values for the following: a. Cash and Marketable securities.. b. Accounts Receivable.. C. Inventories... d. Fixed assets.. e. Accounts payable.. f. Notes Payable.... g. Retained Earnings (assuming no dividends)... h. Retained Earnings (assume dividend payment)... i Net Profit...... j. Additional (Excess) Financing Need (assume no dividend payment)...... k. Additional (Excess) financing need (assume dividend payment). 1. Dividends payable in view of the growth agenda (GHC).. INDEX NUMBER.. SECTION A (35 Marks) (Attempt All in this Section) QUESTION A Sea Blue Ventures, a fishing company, has just approached you to help in determining their financial capacity to pursue the growth agenda they have for the incoming fiscal year of 2018. The CEO, Kofi Bentum, is of the view that that they can grow their 2017 revenue of $250,000 by a good 22% for the year 2018. Because they have not been very successful in raising external capital since they started business 5years ago, Kofi does not want to risk getting stuck in the middle; he wants to be sure that they can pull this growth agenda off smoothly. Your work is cut out for you: to advise Sea Blue Ventures on the feasibility or otherwise of their growth objective. Additional enquiries reveal that Sea Blue normally has net profit margin of 28%, out of which they usually retain 50% for future growth. In relation to this assignment, Sea Blue would also like you to recommend changes, if any, that must be made to their standard dividend policy. In other words, can and should they pay dividends in 2018 and if so how much? Using Table 1 and the information provided in the write-up above, fill in the questions that are topmost on the mind of Kofi Bentum, the CEO. Table 1 Balance sheet as at 31-Dec-17 Assets Cash & Marketable Securities 22,200 Accounts Receivable 34,100 Inventories 82,000 Total Current Assets 138,300 Fixed Assets 270,000 Total Assets 408,300 Liabilities and Stockholders' Equity C Account Payable 62,000 Notes Payable 13,000 Total Current Liabilities 75,000 Long-term Debt 150,000 Common Stock 110,200 Retained Earnings 73,100 Total Liabilities & Stockholders' 408,300 Equity Fill Bentum in on the 2018 values for the following: a. Cash and Marketable securities.. b. Accounts Receivable.. C. Inventories... d. Fixed assets.. e. Accounts payable.. f. Notes Payable.... g. Retained Earnings (assuming no dividends)... h. Retained Earnings (assume dividend payment)... i Net Profit...... j. Additional (Excess) Financing Need (assume no dividend payment)...... k. Additional (Excess) financing need (assume dividend payment). 1. Dividends payable in view of the growth agenda (GHC)
