so this company is operating at 88 percent capacity. The pro forma below is at 100 percent capacity. would the pro forma be the same. They are also asking for the new EFN at 88 percent. As an example calculation, they have done it at 90 percent below. How would the EFN be calculated at 88 percent.

thats ok let someone who can answer it

Part 1.A Tu cepulity Used Capacity = s sales 2014 ABC Limited (ABC) is a boutique men's fashion house. specializing in affordable fashion-forward - Used capacity 88% sales/u separates, with its own production facility. ABC is a growing firm and its financial managers predict that it will need external financing to fuel its growt Wat it will need external financing to fuel its growth. The company's most recent financial statements are provided below. Using the percentage of sales approach, construct Al Pro Forma Balance Sheet based on the following information. How much is ABC's external financial need (EFN)? 88 The company is operating at 100% capacity; The forecasted growth in sales is 18% for 2014; The firm has a dividend policy to pay out 30% of Net Income to its shareholders as cash dividends, and keep the remaining 70% as retained earnings, Year 2013 % of Sales Sales 74,889 100.0% Costs excluding Depreciation 58,413 -78.0% EBITDA 16,476 Depreciation 5,492 -7.3% EBIT 10,984 Interest Expense 306 Pretax Income 10,678 Income Tax (35%) 3,737 Net Income 6,941 % of Sales 16.0% 19.0% 20.0% 55.0% 66.0% Year Cash and Equivalents Accounts Receivable Inventories Total Current Assets PP&E Total Assets Accounts Payable Long-term Debt Total Liabilities Stockholders' Equity Total Liabilities & Equity 2013 11,982 14,229 14,978 41,189 49,427 90,616 11,982 4,500 16,482 74,134 90,616 16.0% Page 4 BJI: 2015 Pro Forma Balance Sheet 2014 11,982 14,229 2015 14,139 16,790 14,978 17,674 1] 2] 3] 4] 5] -6] 7] Year Cash and Equivalents Accounts Receivable Inventories Total Current Assets Fixed Assets (PP&E) Total Assets Accounts Payable Calculatio) 16.0% of sale 19.0% of sale 20.0% of sale [1] + [2] + [3 66.0% of sale [4] + [5 16.0% of sale 41,189 48,603 58,324 49,427 90,616 11,982 106,927 14,139 4,500 8] Debt -9] Total Liabilities 10] Stockholders' Equity 11] Total Liabilities & Equity 16,482 74,134 90,616 4,500 Remains the sam 18,639 [7] + [8 79,892 $74,134 + 70% of N 98,531 [9] + [10 EFN and Excess Operating Capacity (cont.) Current sales of $74,889 is at 90% of full capacity; Full-capacity sales would be $83,210; Fixed Assets/Full-capacity Sales = $49,427/$83,210 = $0.59. This means that we need $0.59 in fixed assets for every $1 in sales once we reach full operating capacity; Projected sales in 2015 is $88,369; Implied fixed assets needed in 2015 = $88,369*0.59 = $52,491 (instead of $58,324); Projected Assets Required = $101,094; DEFN, revised = $101,094 - $98,531 = $2,563