rllidi Adil Pro-Forma Projections Sulle tyear > Sider for One Wheel Today is 1/1/20X1. One Wheel's (OW's) board has dictated that the firm will not increase it's debt or issue shares of stock during the year. OneWheel's CFO believes that, due to the profusion of local ordinances outlawing its product on roads and sidewalks, the firm's 20X1 profit will be low, and the firm's cash balance may fall below its safe level of 5% of TTM sales if it is unable to take on more debt or issue shares of stock Other parameters for 20X1, as provided by the firm's CFO are as listed below. Historical financial statements for OW are also given below Given all this information, help the CFO determine whether the firm's cash level will fall below 5% of TTM sales by the end of 20X1. Help her answer this question by projecting the below statements, and solving for Cash on the Balance Sheet. Hint: first project the PPE roll-forward equation, then the Income Statement, then project the Equity roll forward equation to solve for Equitycoo x Then use this value of Equity to solve for the cash on the Balance Sheet that makes A =L+E. Compute and report numbers for cels that look like this: Also, you may need to compute numbers for cells that look like this: but you do not need to report these numbers, 1 Parameters for Pro-Forma Projections in Year 20X1 (Irrespective of History) Sales Growth 2.50% Dividends set at 0.00% of NI Total Debt Held Constant PIC set at $0.00 Average Depreciable life of Assets 8.00 Years --> Deprec = this % of BOP netPPE: 12.50% EOP netPPE - 64.00% of TTM Sales RD = PreTax Debt interest rate 9.00% Tax Rate 30.00% of EBT Solve for Cash at EOY 20X1 Financial Statements Historical How to Project EOY-1 20X-1 20x0 % 20X1 PPE Roll Forward Eqs Item PPEnet (BOP) Deprec PPEnet (EOP) EOYO Project as 60.000 (7.500) % of BOP PPEnet 11.500 64.000 64.000 (8.000) 1 2 60.000 Y. 20X-1 Income Statement YO 20x Proiect as 20x1 Y-1 20X-1 % 2.5% Income Statement Sales COGS Depreciation SGA EBIT YO 20X0 100.000 65.000 7.500 20.000 7.500 Project as Sales Growth % Sales PPE Roll Fwd % Sales 20X1 102.500 3 8.000 20.500 See equation 4 Interest Tax NI 1.620 1.764 4.116 EBT Tax Rate 1.673 3.902 EOY-1 20X-1 Project as 20X1 31.437 Equity Roll Forward Eqs Item E(BOP) NI DIV PIC E(EOP) EOYO 20x0 27.321 4.116 0.000 0.000 31.437 Zero (Policy) Zero (Policy) 0.000 0.000 5 27 321 EOY-1 20X-1 EOYO 20x0 % Balance Sheets Cash AR Inventory Other CA Total CA 5.000 15.000 30.000 12.000 62.000 Project as Solve for this % Sales % Sales % Sales 20X1 7 15.375 30.750 12.300 PPE(net) Total Assets 60.000 64.000 126.000 AP Accrued Liabilities Other CL TotalCL 30.000 25.000 15.000 70.000 % Sales % Sales % Sales 30.750 25.625 15.375 71.750 18.000 6 20.000 90.000 Debt Total Liabilities Equity Check A. (LE) 91.750 36.000 0.0 Should = 0.0 Question 10 1 pts What is the absolute value of quantity 3? Question 11 1 pts What is the absolute value of quantity 1? D Question 12 1 pts What is the absolute value of quantity 5? Question 13 1 pts Question 13 1 pts What is the absolute value of quantity 77 Question 14 1 pts What is the absolute value of quantity 4? Question 15 1 pts What is the absolute value of quantity 6? D Question 16 1 pts Question 16 1 pts Based on your projections will the CFO believe that the firm's cash level is safe at EOY 20X1? Answer Yes or No and provide one reason Because, based on the CFO's criteria, the frem will have an unsafe Altman Z-score if it does not increase its cash balance Because, based on the CFO's criteria, the firm will be unsafe if it does not initiate a merger, Yes Because the firm's debt must increase from 200 to 20X1 No Because the firm's cash level will be more than 5% of TTM sales, Because the firm's cash level will be less than 5% of TTM sales. Question 17 1 pts What is the value of quantity 2? Consider this information for the next set of questions. Heads up: the order in rllidi Adil Pro-Forma Projections Sulle tyear > Sider for One Wheel Today is 1/1/20X1. One Wheel's (OW's) board has dictated that the firm will not increase it's debt or issue shares of stock during the year. OneWheel's CFO believes that, due to the profusion of local ordinances outlawing its product on roads and sidewalks, the firm's 20X1 profit will be low, and the firm's cash balance may fall below its safe level of 5% of TTM sales if it is unable to take on more debt or issue shares of stock Other parameters for 20X1, as provided by the firm's CFO are as listed below. Historical financial statements for OW are also given below Given all this information, help the CFO determine whether the firm's cash level will fall below 5% of TTM sales by the end of 20X1. Help her answer this question by projecting the below statements, and solving for Cash on the Balance Sheet. Hint: first project the PPE roll-forward equation, then the Income Statement, then project the Equity roll forward equation to solve for Equitycoo x Then use this value of Equity to solve for the cash on the Balance Sheet that makes A =L+E. Compute and report numbers for cels that look like this: Also, you may need to compute numbers for cells that look like this: but you do not need to report these numbers, 1 Parameters for Pro-Forma Projections in Year 20X1 (Irrespective of History) Sales Growth 2.50% Dividends set at 0.00% of NI Total Debt Held Constant PIC set at $0.00 Average Depreciable life of Assets 8.00 Years --> Deprec = this % of BOP netPPE: 12.50% EOP netPPE - 64.00% of TTM Sales RD = PreTax Debt interest rate 9.00% Tax Rate 30.00% of EBT Solve for Cash at EOY 20X1 Financial Statements Historical How to Project EOY-1 20X-1 20x0 % 20X1 PPE Roll Forward Eqs Item PPEnet (BOP) Deprec PPEnet (EOP) EOYO Project as 60.000 (7.500) % of BOP PPEnet 11.500 64.000 64.000 (8.000) 1 2 60.000 Y. 20X-1 Income Statement YO 20x Proiect as 20x1 Y-1 20X-1 % 2.5% Income Statement Sales COGS Depreciation SGA EBIT YO 20X0 100.000 65.000 7.500 20.000 7.500 Project as Sales Growth % Sales PPE Roll Fwd % Sales 20X1 102.500 3 8.000 20.500 See equation 4 Interest Tax NI 1.620 1.764 4.116 EBT Tax Rate 1.673 3.902 EOY-1 20X-1 Project as 20X1 31.437 Equity Roll Forward Eqs Item E(BOP) NI DIV PIC E(EOP) EOYO 20x0 27.321 4.116 0.000 0.000 31.437 Zero (Policy) Zero (Policy) 0.000 0.000 5 27 321 EOY-1 20X-1 EOYO 20x0 % Balance Sheets Cash AR Inventory Other CA Total CA 5.000 15.000 30.000 12.000 62.000 Project as Solve for this % Sales % Sales % Sales 20X1 7 15.375 30.750 12.300 PPE(net) Total Assets 60.000 64.000 126.000 AP Accrued Liabilities Other CL TotalCL 30.000 25.000 15.000 70.000 % Sales % Sales % Sales 30.750 25.625 15.375 71.750 18.000 6 20.000 90.000 Debt Total Liabilities Equity Check A. (LE) 91.750 36.000 0.0 Should = 0.0 Question 10 1 pts What is the absolute value of quantity 3? Question 11 1 pts What is the absolute value of quantity 1? D Question 12 1 pts What is the absolute value of quantity 5? Question 13 1 pts Question 13 1 pts What is the absolute value of quantity 77 Question 14 1 pts What is the absolute value of quantity 4? Question 15 1 pts What is the absolute value of quantity 6? D Question 16 1 pts Question 16 1 pts Based on your projections will the CFO believe that the firm's cash level is safe at EOY 20X1? Answer Yes or No and provide one reason Because, based on the CFO's criteria, the frem will have an unsafe Altman Z-score if it does not increase its cash balance Because, based on the CFO's criteria, the firm will be unsafe if it does not initiate a merger, Yes Because the firm's debt must increase from 200 to 20X1 No Because the firm's cash level will be more than 5% of TTM sales, Because the firm's cash level will be less than 5% of TTM sales. Question 17 1 pts What is the value of quantity 2? Consider this information for the next set of questions. Heads up: the order in