1. Referring to the forecast assumptions in the column labeled A, build the 2022 proforma financial statements and compute EFN in the column labeled there will be no change in ST and LT debt.
2. Repeat your forecast, but this time using the assumptions in column B, and building your profomas and compute EFN in the column B-Forecast. Assume no change in ST and LT debt.
3. Repeat your forecast, but this time using the assumptions in column C, and building your profomas and compute EFN in the column C-Forecast. Assume no change in ST and LT debt.
4. In your A-Forecast, you should have an EFN>0. Briefly describe what this means for the firm, and how the firm might resolve this with ST and LT debt.
5. In your C-Forecast you should have an EFN
6. 

E(2022) E(2022) A E(2022) 25% 87% 9% 40% 40% 60% E(2022) 17.6 Forecast Assumptions 2021 Forecast Sales Growth Rate % of Sales 87% % of Sales 9% Tax Rate 40% Dividend % of Net Income 40% Reinvestment % of Net Income 60% 2021 Cash Days 17.6 Collection Period 76.3 Inventory Days 63.3 Current Ratio 2.0 Fixed Asset Turnover 5.5 Days Payables 33.8 % of Sales 7.28% Liabilities / Assets 62% Interest Rate on Debt 7.2% E(2022) ($-thousands) 2021 Cash 77,500 Accounts Receivable 336,000 Inventory 241,500 Total Current Assets 655,000 Net Fixed Assets 292,500 Total Assets 947,500 Accounts Payable 129,000 Short-term Debt 84,000 Other Current Liabilities 117,000 Total Current Liabilities 330,000 Long-term Debt 256,500 Common Equity 361,000 Total Liabilities & Equity947,500 External Funds Needed E(2022) - Lai*10:33 32 3102 ***00379323301 76.3 63.3 2.0 5.5 7.28% 40.0 7.28% 62% 7.2% A-Forecast E(2022) B-Forecast E(2022) C-Forecast E(2022) Financial Statements $thousands 2021 Sales 1,607,500 COGS 1,392,500 Gross Profit 215,000 SGA 145,000 EBIT 70,000 Interest Expense 24,500 Earnings Before Taxes 45,500 Taxes 18,200 Net Income 27,300 Dividends 10,920 Addition Retained Earnings 16,380 E(2022) E(2022) A E(2022) 25% 87% 9% 40% 40% 60% E(2022) 17.6 Forecast Assumptions 2021 Forecast Sales Growth Rate % of Sales 87% % of Sales 9% Tax Rate 40% Dividend % of Net Income 40% Reinvestment % of Net Income 60% 2021 Cash Days 17.6 Collection Period 76.3 Inventory Days 63.3 Current Ratio 2.0 Fixed Asset Turnover 5.5 Days Payables 33.8 % of Sales 7.28% Liabilities / Assets 62% Interest Rate on Debt 7.2% E(2022) ($-thousands) 2021 Cash 77,500 Accounts Receivable 336,000 Inventory 241,500 Total Current Assets 655,000 Net Fixed Assets 292,500 Total Assets 947,500 Accounts Payable 129,000 Short-term Debt 84,000 Other Current Liabilities 117,000 Total Current Liabilities 330,000 Long-term Debt 256,500 Common Equity 361,000 Total Liabilities & Equity947,500 External Funds Needed E(2022) - Lai*10:33 32 3102 ***00379323301 76.3 63.3 2.0 5.5 7.28% 40.0 7.28% 62% 7.2% A-Forecast E(2022) B-Forecast E(2022) C-Forecast E(2022) Financial Statements $thousands 2021 Sales 1,607,500 COGS 1,392,500 Gross Profit 215,000 SGA 145,000 EBIT 70,000 Interest Expense 24,500 Earnings Before Taxes 45,500 Taxes 18,200 Net Income 27,300 Dividends 10,920 Addition Retained Earnings 16,380