Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Preparing Comparative Financial Statements is the most used technique for analyzing financial statements. This technique determines a business's profitability and financial position by comparing financial
Preparing Comparative Financial Statements is the most used technique for analyzing financial statements. This technique determines a business's profitability and financial position by comparing financial statements for two or more periods. The income statements and balance sheets are typically prepared comparatively for such an analysis.
Jenny Chang, a finance student at California Polytechnic State University, received an internship in the finance management training program with Smart Electric Parts Company.
Jenny was asked to prepare the companys financial statements and provide a comparative analysis. These statements primarily include income, balance sheets, and cash flow statements.
Financial information as of December Financial information as of December
Cost of goods sold $ Cost of goods sold $
Cash $ Cash $
Depreciation $ Depreciation $
Interest expense $ Interest expense $
Selling & Administrative $ Selling & Administrative $
Accounts payable $ Accounts payable $
Net fixed assets $ Net fixed assets $
Sales $ Sales $
Accounts receivable $ Accounts receivable $
Current portion of Longterm debt $ Current portion of Longterm debt $
Longterm debt $ Longterm debt $
Equity in Equity raised in
Inventory $ Inventory $
Cost of Debt Cost of Debt
Unlevered Cost of Equity Unlevered Cost of Equity
Outstanding Shares Outstanding Shares
Tax rate Tax rate
Dividend percentage Dividend percentage
Prepare income and balance sheet statements for and
Prepare cash flow from assets and cash flow to creditors and equity holders.
What are the capital spending and changes in net working capital for
What is the DuPont Identity for and Explain the firms condition and performance changes, whether they indicate improvement, deterioration, or some combination.
What are the internal and sustainable growth rates for and Define and discuss the implication of these two growth rates in the companys longterm planning.
Part II
After submitting the financial statements, she was asked to provide a pro forma financial statement for Jenney remembered from her finance classes that she could set up the pro forma financial statement based on the percentage of sales method. Using the sustainable growth rate answer the following questions for Jenny?
a What are the pro forma financial statements for
b What is the operating cash flow for
c What is the free cash flow for
d What is external financing needed EFN if any, for
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started