please help. This is one question with two parts.

Mansfield Corporation had 20X1 sales of $100 million. The balance sheet items that vary directly with sales and the profit margin are as follows: Percent 59 15 20 Cash Accounts receivable Inventory Net fixed assets Accounts payable Accruals 40 Profit margin after taxes The dividend payout rate is 50 percent of earnings, and the balance in retained carnings at the end of 20XT was $33 million. Notes payable are currently $7 million Long-term bonds and common stock are constant at $5 million and sto million respectively How much additional external capital will be required for next year il sales increase 15 percent? (Assume that the company is already operating at dull capacity, . The dividend payout rate is 50 percent of earnings, and the balance in retained earnings at the end of 20X1 was $33 million. Notes payable are currently $7 million. Long-term bonds and common stock are constant at $5 million and $10 million. respectively. How much additional external capital will be required for next year if sales increase 15 percent? (Assume that the company is already operating at full capacity.) b. What will happen to external fund requirements if Mansfield Corporation reduces the payout ratio, grows at a slower rate, or suffers a decline in its profit margin? Discuss each of these separately. Prepare a pro forma balance sheet for 20X2. assuming that any external funds being acquired will be in the form of notes payable Disregard the information in part b in answering this question that is, use the original information and part a in constructing your pro forma balance sheet) COMPREHENSIVE PROBLEM The difficult part of solving a problem of this nature is to know what to do with the Marsh Corporation information contained within a story problem. Therefore, this problem will be easier ( Financial forecast to complete if you rely on Chapter 4 for the format of all required schedules. With seasonal The Marsh Corporation makes standard-size 2-inch fasteners, which it sells for production) $155 per thousand. Mr. Marsh is the majority owner and manages the inventory and (L04-5) finances of the company. He estimates sales for the following months to be January February March April May $263,500 (1700,000 fasteners) $186.000 1.200,000 fasteners) $217.000 (1,100,000 Fasteners) $310.000 (2,000,000 lasteners) $387,500 (2,500,000 Fasteners) Last year Marsh Corporation's sales were $175.000 in November and $262.500 in December (1.500.000 fasteners). Mr. Marsh is preparing for a meeting with his banker to arrange the financing for the first quarter. Based on his sales forecast and the following information, which he has provided, your job as his new financial analysis to prepare monthly cash budget monthly and quarterly pro forma income statements, proposema juurde pa balance Danielson, 17e, Financial Forecasting the first quarter. Based on his sales forecast and the following information, which he has provided, your job as his new financial analyst is to prepare a monthly cash budget, monthly and quarterly pro forma income statements, a pro forma quarterly balance sheet, and all necessary supporting schedules for the first quarter. History shows that Marsh Corporation collects 50 percent of its accounts receiv- able in the normal 30-day credit period (the month after the sale) and the other 50 percent in 60 days (two months after the sale). It pays for its materials 30 days after receipt. In general, Mr. Marsh likes to keep a two-month supply of inventory in anticipation of sales. Inventory at the beginning of December was 2,600,000 units. (This was not equal to his desired two-month supply.) The major cost of production is the purchase of raw materials in the form of steel rods, which are cut, threaded, and finished. Last year, raw material costs were $52 per 1,000 fasteners, but Mr. Marsh has just been notified that material costs have risen. effective January 1, to $60 per 1,000 fasteners. The Marsh Corporation uses FIFO inventory accounting. Labor costs are relatively constant at $20 per thousand fasten- ers, since workers are paid on a piecework basis. Overhead is allocated at $10 per thousand units, and selling and administrative expense is 20 percent of sales. Labor expense and overhead are direct cash outflows paid in the month incurred, while interest and taxes are paid quarterly. The corporation usually maintains a minimum cash balance of $25.000, and it puts its excess cash into marketable securities. The average tax rate is 40 percent, and Mr. Marsh usually pays out 50 percent of net income in dividends to stockholders Marketable securities are sold before funds are borrowed when a cash shortage is faced. Ignore the interest on any short-term borrowings. Interest of $8,000 on the long-term debt is paid in March, but it is allocated over each month for accounting purposes. Taxes and dividends are paid in March As of year-end, the Marsh Corporation balance sheet was as follows: A D 1 MARSH CORPORATION Balance Sheet December 31, 20X1 2 Assets 3 Current assets: 4 Cash $ 30,000 5 Accounts receivable 320,000 6 Inventory 237,800 7 Total current assets $ 587,800 8 Fixed assets 9 Plant and equipment $ 1.000.000 10 Less: Accumulated depreciation 200.000 800.000 $1387 800 12 Total assets Llablities and Stockholders' Equity Accounts payable 13 93,500 Notes payable 15 400.000 Long-term debt, 8 percent Common stock 504,200 17 Retained coming 390.000 18 Totalla and Stockholm equity $1.387.800 Mansfield Corporation had 20X1 sales of $100 million. The balance sheet items that vary directly with sales and the profit margin are as follows: Percent 59 15 20 Cash Accounts receivable Inventory Net fixed assets Accounts payable Accruals 40 Profit margin after taxes The dividend payout rate is 50 percent of earnings, and the balance in retained carnings at the end of 20XT was $33 million. Notes payable are currently $7 million Long-term bonds and common stock are constant at $5 million and sto million respectively How much additional external capital will be required for next year il sales increase 15 percent? (Assume that the company is already operating at dull capacity, . The dividend payout rate is 50 percent of earnings, and the balance in retained earnings at the end of 20X1 was $33 million. Notes payable are currently $7 million. Long-term bonds and common stock are constant at $5 million and $10 million. respectively. How much additional external capital will be required for next year if sales increase 15 percent? (Assume that the company is already operating at full capacity.) b. What will happen to external fund requirements if Mansfield Corporation reduces the payout ratio, grows at a slower rate, or suffers a decline in its profit margin? Discuss each of these separately. Prepare a pro forma balance sheet for 20X2. assuming that any external funds being acquired will be in the form of notes payable Disregard the information in part b in answering this question that is, use the original information and part a in constructing your pro forma balance sheet) COMPREHENSIVE PROBLEM The difficult part of solving a problem of this nature is to know what to do with the Marsh Corporation information contained within a story problem. Therefore, this problem will be easier ( Financial forecast to complete if you rely on Chapter 4 for the format of all required schedules. With seasonal The Marsh Corporation makes standard-size 2-inch fasteners, which it sells for production) $155 per thousand. Mr. Marsh is the majority owner and manages the inventory and (L04-5) finances of the company. He estimates sales for the following months to be January February March April May $263,500 (1700,000 fasteners) $186.000 1.200,000 fasteners) $217.000 (1,100,000 Fasteners) $310.000 (2,000,000 lasteners) $387,500 (2,500,000 Fasteners) Last year Marsh Corporation's sales were $175.000 in November and $262.500 in December (1.500.000 fasteners). Mr. Marsh is preparing for a meeting with his banker to arrange the financing for the first quarter. Based on his sales forecast and the following information, which he has provided, your job as his new financial analysis to prepare monthly cash budget monthly and quarterly pro forma income statements, proposema juurde pa balance Danielson, 17e, Financial Forecasting the first quarter. Based on his sales forecast and the following information, which he has provided, your job as his new financial analyst is to prepare a monthly cash budget, monthly and quarterly pro forma income statements, a pro forma quarterly balance sheet, and all necessary supporting schedules for the first quarter. History shows that Marsh Corporation collects 50 percent of its accounts receiv- able in the normal 30-day credit period (the month after the sale) and the other 50 percent in 60 days (two months after the sale). It pays for its materials 30 days after receipt. In general, Mr. Marsh likes to keep a two-month supply of inventory in anticipation of sales. Inventory at the beginning of December was 2,600,000 units. (This was not equal to his desired two-month supply.) The major cost of production is the purchase of raw materials in the form of steel rods, which are cut, threaded, and finished. Last year, raw material costs were $52 per 1,000 fasteners, but Mr. Marsh has just been notified that material costs have risen. effective January 1, to $60 per 1,000 fasteners. The Marsh Corporation uses FIFO inventory accounting. Labor costs are relatively constant at $20 per thousand fasten- ers, since workers are paid on a piecework basis. Overhead is allocated at $10 per thousand units, and selling and administrative expense is 20 percent of sales. Labor expense and overhead are direct cash outflows paid in the month incurred, while interest and taxes are paid quarterly. The corporation usually maintains a minimum cash balance of $25.000, and it puts its excess cash into marketable securities. The average tax rate is 40 percent, and Mr. Marsh usually pays out 50 percent of net income in dividends to stockholders Marketable securities are sold before funds are borrowed when a cash shortage is faced. Ignore the interest on any short-term borrowings. Interest of $8,000 on the long-term debt is paid in March, but it is allocated over each month for accounting purposes. Taxes and dividends are paid in March As of year-end, the Marsh Corporation balance sheet was as follows: A D 1 MARSH CORPORATION Balance Sheet December 31, 20X1 2 Assets 3 Current assets: 4 Cash $ 30,000 5 Accounts receivable 320,000 6 Inventory 237,800 7 Total current assets $ 587,800 8 Fixed assets 9 Plant and equipment $ 1.000.000 10 Less: Accumulated depreciation 200.000 800.000 $1387 800 12 Total assets Llablities and Stockholders' Equity Accounts payable 13 93,500 Notes payable 15 400.000 Long-term debt, 8 percent Common stock 504,200 17 Retained coming 390.000 18 Totalla and Stockholm equity $1.387.800