Problem 23 00 HEM, Inc. had sales of $10 million and a net profit margin of 10 percent in 2030. Management expects sales to grow to 511.5 million and 513 million in 2001 and 20x2, respectively Management wants to know if additional funds will be necessary to finance this anticipated growth. Currently, the form is not operating at hol capacity and should be able to sustaina 20 percent increase in sales. However, further increases in sales will require 3 million in plant and equipment for every $5 million increase in sales. (Note that even if sales increase by less than 5 million, the total amount of million investment in plant and equipment is still required.) The firm's balinon sheet is as follows: HOM, Incorporated Balance Sheet as of 12/31/XO Assets Liabilities and Equity Cash $2,200,000 Accra $2.500.000 Accounts receivable 2,700,000 Accounts payable 2,000,000 Inventory 1,500,000 Notes payable 400,000 Plant and equipment 2,000,000 Long-term debt 2,000,000 Equity 1.500,000 38,400,000 $8.400.000 Management has followed a pocy of distributing at least 30 percent of carros es dividends. Management believes that the percent of sales method of forecasting is suficient to wwer the question. "Willoutside Funding be necessary to use this technique, management has sumed that accounts receivable, inventory, accruals, and accounts payable will vary with the level of sales Cash will not change Prepare projected balance sheets for 2011 and 70x2 that incorporate de financing My short term funds that are required should be obtained through an from the bon, and any excess short term funds should be propriately wested. May long term wong that is needed should be obtained rough long-term detit, Hound you mwen nearest do HOM, Incorporated Balance sheet as of 12/31/X1 Assets Liabilities and Equity Cash Accrual Marketable securities Accounts payable Accounts receivable Notes payable Inventory Long term debit Pantander Equity HEM, Incorporated Balance sheet as of 12/31/X2 Assets Liabilities and Equity Cash Accruals Marketable sepanties Accounts payable Management has followed a policy of distributing at least so percent of earnings as dividends. Management believes that the percent of sales method of forecasting is sufficient to answer the question, Will outside funding be necessary to use this technique, management has assumed that accounts receivable, inventory, accruals, and accounts payable wil wory with the level of sales Cash wit not change . Prepare projected balance sheets for 201 and 20x that incorporate any necessary outside financing. Any short-term funds that are required should be obtained through a loan from the bank, and any excess short-term funds should be appropriately invested. Any long term financing that is needed should be obtained through long-term debt. Round your answers to the nearest dollar HOM, Incorporated Balance Sheet as of 12/31/X1 Assets Liabilities and Equity Cash Accruals Marketable securities Accounts payable Accounts receivable Notes payable Inventory Long-term debt Plant and equipment Equity HEM. Incorporated Balance sheet as of 12/31/X2 Assets Liabilities and Equity Cash 5 Accrual Marketable soutie Accounts payable Accounts receive Notes payable Inventory Long-term debe Plantander Equity b. te did not distribute no percent of cornings could it sustain the expansion without issuing addition kong term debe round your answer to the newest doar in the tomad not be copercent of its earning the menum pouble retained earnings would be A change in the dividend pokey Cover the expansion in plant and equipment ir the creditors in part are we a current rate of 2.2:1 would that affect the time inanong na 201 and 20x2 , what odation actions contes the form found your answers to two deamal places According to the Forecast in part, the current ratio in 20X1 and 202 are land respectively. If the weare current ratif 2.21.the timchelet meet the current ratio requirement and donations to low current ratio If the percent of sales forecasts were with the following regression Problem 23 00 HEM, Inc. had sales of $10 million and a net profit margin of 10 percent in 2030. Management expects sales to grow to 511.5 million and 513 million in 2001 and 20x2, respectively Management wants to know if additional funds will be necessary to finance this anticipated growth. Currently, the form is not operating at hol capacity and should be able to sustaina 20 percent increase in sales. However, further increases in sales will require 3 million in plant and equipment for every $5 million increase in sales. (Note that even if sales increase by less than 5 million, the total amount of million investment in plant and equipment is still required.) The firm's balinon sheet is as follows: HOM, Incorporated Balance Sheet as of 12/31/XO Assets Liabilities and Equity Cash $2,200,000 Accra $2.500.000 Accounts receivable 2,700,000 Accounts payable 2,000,000 Inventory 1,500,000 Notes payable 400,000 Plant and equipment 2,000,000 Long-term debt 2,000,000 Equity 1.500,000 38,400,000 $8.400.000 Management has followed a pocy of distributing at least 30 percent of carros es dividends. Management believes that the percent of sales method of forecasting is suficient to wwer the question. "Willoutside Funding be necessary to use this technique, management has sumed that accounts receivable, inventory, accruals, and accounts payable will vary with the level of sales Cash will not change Prepare projected balance sheets for 2011 and 70x2 that incorporate de financing My short term funds that are required should be obtained through an from the bon, and any excess short term funds should be propriately wested. May long term wong that is needed should be obtained rough long-term detit, Hound you mwen nearest do HOM, Incorporated Balance sheet as of 12/31/X1 Assets Liabilities and Equity Cash Accrual Marketable securities Accounts payable Accounts receivable Notes payable Inventory Long term debit Pantander Equity HEM, Incorporated Balance sheet as of 12/31/X2 Assets Liabilities and Equity Cash Accruals Marketable sepanties Accounts payable Management has followed a policy of distributing at least so percent of earnings as dividends. Management believes that the percent of sales method of forecasting is sufficient to answer the question, Will outside funding be necessary to use this technique, management has assumed that accounts receivable, inventory, accruals, and accounts payable wil wory with the level of sales Cash wit not change . Prepare projected balance sheets for 201 and 20x that incorporate any necessary outside financing. Any short-term funds that are required should be obtained through a loan from the bank, and any excess short-term funds should be appropriately invested. Any long term financing that is needed should be obtained through long-term debt. Round your answers to the nearest dollar HOM, Incorporated Balance Sheet as of 12/31/X1 Assets Liabilities and Equity Cash Accruals Marketable securities Accounts payable Accounts receivable Notes payable Inventory Long-term debt Plant and equipment Equity HEM. Incorporated Balance sheet as of 12/31/X2 Assets Liabilities and Equity Cash 5 Accrual Marketable soutie Accounts payable Accounts receive Notes payable Inventory Long-term debe Plantander Equity b. te did not distribute no percent of cornings could it sustain the expansion without issuing addition kong term debe round your answer to the newest doar in the tomad not be copercent of its earning the menum pouble retained earnings would be A change in the dividend pokey Cover the expansion in plant and equipment ir the creditors in part are we a current rate of 2.2:1 would that affect the time inanong na 201 and 20x2 , what odation actions contes the form found your answers to two deamal places According to the Forecast in part, the current ratio in 20X1 and 202 are land respectively. If the weare current ratif 2.21.the timchelet meet the current ratio requirement and donations to low current ratio If the percent of sales forecasts were with the following regression