QUESTION 9 09 Networks is a leading provider of outsourced data centre infrastructure such as webservers and data storage. Use the percent of sales method based on Year 5 and the assumptions listed below to forecast the financial statements for 09 Networks for Year 6. (Note the ratios to sales provided in the table to help you make the forecast.) Assumptions: Sales growth: 20% Cost of debt: 4% Tax rate: 35% Depreciation rate: 5% CAPEX: $4,000,000 Cash is the plug account. Long-term debt and common stock are held constant, No dividends are paid in Year 6. 09 Networks Income Statement and Balance Sheet As of December 31, Year 5 (S 000's) Year 5 Ratios Year 6 Revenue $37.829 $45,395 COGS 25.840 0.683074 SG&A 11.163 Dep Exp. 535 EBIT 291 Int. Exp 136 EBT 155 100 Net Income Assets Cash Year 5 Year 6 71,301 Other Current Assets 0.133390 Total Current Assets 5,046 76,347 36,757 113,104 PP&E Total Assets 7,688 0.203230 4,091 4,091 11,779 Liabilities & Stockholders Equity Total Current Liabilities Long-Term Debt Total Liabilities Shareholders' Equity Common Stock Retained Earnings Total Owners' Equity Total Liabilities and Owners Equity 178,328 178,328 -77,003 101,325 113,104 0.203230 7,688 4,091 11,779 4,091 Liabilities & Stockholders' Equity Total Current Liabilities Long-Term Debt Total Liabilities Shareholders' Equity Common Stock Retained Earnings Total Owners' Equity Total Liabilities and Owners Equity 178,328 178,328 -77,003 101,325 113,104 What is the change in the cash account from Year 5 to Year 6? Ca.-$7.081 million b. $2.292 million C.-36.702 million d.-S2.220 million 101 million QUESTION 9 09 Networks is a leading provider of outsourced data centre infrastructure such as webservers and data storage. Use the percent of sales method based on Year 5 and the assumptions listed below to forecast the financial statements for 09 Networks for Year 6. (Note the ratios to sales provided in the table to help you make the forecast.) Assumptions: Sales growth: 20% Cost of debt: 4% Tax rate: 35% Depreciation rate: 5% CAPEX: $4,000,000 Cash is the plug account. Long-term debt and common stock are held constant, No dividends are paid in Year 6. 09 Networks Income Statement and Balance Sheet As of December 31, Year 5 (S 000's) Year 5 Ratios Year 6 Revenue $37.829 $45,395 COGS 25.840 0.683074 SG&A 11.163 Dep Exp. 535 EBIT 291 Int. Exp 136 EBT 155 100 Net Income Assets Cash Year 5 Year 6 71,301 Other Current Assets 0.133390 Total Current Assets 5,046 76,347 36,757 113,104 PP&E Total Assets 7,688 0.203230 4,091 4,091 11,779 Liabilities & Stockholders Equity Total Current Liabilities Long-Term Debt Total Liabilities Shareholders' Equity Common Stock Retained Earnings Total Owners' Equity Total Liabilities and Owners Equity 178,328 178,328 -77,003 101,325 113,104 0.203230 7,688 4,091 11,779 4,091 Liabilities & Stockholders' Equity Total Current Liabilities Long-Term Debt Total Liabilities Shareholders' Equity Common Stock Retained Earnings Total Owners' Equity Total Liabilities and Owners Equity 178,328 178,328 -77,003 101,325 113,104 What is the change in the cash account from Year 5 to Year 6? Ca.-$7.081 million b. $2.292 million C.-36.702 million d.-S2.220 million 101 million
