Problem SFP4-2 FINANCIAL PLANNING AND GROWTH CONSIDERATIONS Clueless, Inc. Balance Sheet at 12/31/2019 (000's) Cash & Marketable Securities 60 Accounts Payable 50 Accounts Receivable Long-Term Debt 293 Inventories 150 Total Liabilities Total Current Assets 321 Common Stock 145 Net Fixed Assets 250 Retained Earnings 83 Total Assets 571 Total Liabilities and Capi 571 Additional considerations: Sales for 2019 were $1,000,000; Net Income after Tax = $60,000 Management's estimates for the next years: Sales growth @30% for 2020 Net Income after Taxes estimated at 6% of Sales Proposed Dividend distribution = 40% of after-tax profits Proposed Debt to Assets ratio = 60% Projected Year-End Cash Balance = 6% of Sales Projected Year-End Accounts Receivable Duration=40 days Projected levels of Inventory = 15% of Sales Projected Accounts Payable levels = 5% of Sales Projected level of Net Fixed Assets 25% of Sales No projected changes in the levels of Common Stock are proposed Required: Prepare a 2020 projected Income Statement. Balance Sheet and Statement of Cash Identify implications of excessive growth expectations upon capital structure Calculate a more responsible level of growth to avoid financial distress FP 4-1 Strategic Growth Planning Sailing into the Sunset Burial Monument Co., Inc. vishes to expand their market territory and has sought counsel from you as to their fiscal capacity to sponsor their growth opportunities. As it presently stands, they have been generating a "bottom-line" profit of approximately 5%, for the past five years, but their forecasts for the oncoming year, put this performance at 6x, while management is cognizant that shareholders would love the best of both worlds, dividends as well as growth, they fool that any dividend distributions of less than 40% would be imprudent. Last year, the firm was able to produce an "asset turnover" of only 14x, but associated the poor turnover to a piece of equipment purchased in late December of last year. Management forecasts that the asset turnover, this year, is targeted at 2x!! Last, their bond covenant precludes all forms of debt in excess of 60% of the firm' assets. To what extent would you suggest that Sailing into the Sunset Burial Monument Co., Inc. plans its next year's salos, given that the sales for the year, just ended, were $10,000,000. And what would you forecast as their target profit? If Sailing into the Sunset Burial Monument Co., Inc. had wished to expand its market by an additional $3,000,000 over the prior year, would they be able to accomplish this goal, with a view toward a more conservative dividend policy? If so, how?? Problem SFP4-2 FINANCIAL PLANNING AND GROWTH CONSIDERATIONS Clueless, Inc. Balance Sheet at 12/31/2019 (000's) Cash & Marketable Securities 60 Accounts Payable 50 Accounts Receivable 111 Long-Term Debt 293 Inventories 150 Total Liabilities 343 Total Current Assets 321 Common Stock 145 Net Fixed Assets 250 Retained Earnings 83 Total Assets 571 Total Liabilities and Capit 571 Additional considerations: Sales for 2019 were $1,000,000; Net Income after Tax = $60,000 Management's estimates for the next years: Sales growth @30% for 2020 Net Income after Taxes estimated at 6% of Sales Proposed Dividend distribution = 40% of after-tax profits Proposed Debt to Assets ratio = 60% Projected Year-End Cash Balance = 6% of Sales Projected Year-End Accounts Receivable Duration = 40 days Projected levels of Inventory = 15% of Sales Projected Accounts Payable levels = 5% of Sales Projected level of Net Fixed Assets = 25% of Sales No projected changes in the levels of Common Stock are proposed Required: Prepare a 2020 projected Income Statement, Balance Sheet and Statement of Cash Identify implications of excessive growth expectations upon capital structure Calculate a more responsible level of growth to avoid financial distress FP 4-1 Strategic Growth Planning Sailing into the Sunset Burial Monument Co., Inc. wishes to expand their narkot territory and has sought counsel from you as to their fiscal capacity to sponsor their growth opportunities. As it presently stands, they have been generating a "bottom-line" profit of approximately 5%, for the past five years, but their forecasts for the onconing year, put this performance at 6x. While management is cognizant that shareholders would love the best of both worlde, dividends as well as growth, they fool that any dividend distributions of less than 40% vould be imprudent. Last year, the firm was able to produce an "asset turnover" of only 14x, but associated the poor turnover to a piece of equipment purchased in late December of last year. Management forecasts that the asset turnover, this year, is targeted at 2x!! Last, their bond covenant precludes all forms of debt in excess of 60% of the firm' assets. To what extent would you suggest that Sailing into the Sunset Burial Monument Co., Inc. plans its next year . salos, given that the sales for the year, just ended, were $10,000,000. And what would you forecast as their target profit? If Sailing into the Sunset Burial Monument Co., Inc. had wished to expand its market by an additional $3,000,000 over the prior year, would they be able to accomplish this goal, with a view toward a more conservative dividend policy? If so, how