Question
NEED ANSWER ASAP to complete an EXAM: The Optical Scam Company has forecast a sales growth rate of 25 percent for next year. The current
NEED ANSWER ASAP to complete an EXAM:
The Optical Scam Company has forecast a sales growth rate of 25 percent for next year. The current financial statements are shown here: |
Income Statement | ||||
Sales | $ | 32,000,000 | ||
Costs | 26,309,400 | |||
Taxable income | $ | 5,690,600 | ||
Taxes | 1,991,710 | |||
Net income | $ | 3,698,890 | ||
Dividends | $ | 1,479,556 | ||
Addition to retained earnings | 2,219,334 | |||
Balance Sheet | |||||||
Assets | Liabilities and Equity | ||||||
Current assets | $ | 7,360,000 | Short-term debt | $ | 7,040,000 | ||
Long-term debt | 2,240,000 | ||||||
Fixed assets | 18,560,000 | ||||||
Common stock | $ | 6,070,000 | |||||
Accumulated retained earnings | 10,570,000 | ||||||
Total equity | $ | 16,640,000 | |||||
Total assets | $ | 25,920,000 | Total liabilities and equity | $ | 25,920,000 | ||
a. | Calculate the external financing needed for next year. (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) |
External financing needed | $ |
b-1. | Prepare the firms pro forma balance sheet for next year. (Do not round intermediate calculations and round your answers to the nearest whole number, e.g., 32.) |
Balance Sheet | |||
Assets | Liabilities and equity | ||
Current assets | $ | Short-term debt | $ |
Long-term debt | |||
Fixed assets | |||
Common stock | $ | ||
Accumulated retained earnings | |||
Total equity | |||
Total assets | $ | Total liabilities and equity | $ |
b-2. | Calculate the external financing needed. (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) |
External financing needed | $ |
c. | Calculate the sustainable growth rate for the company based on the current financial statements. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) |
Sustainable growth rate | % |
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