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solve these questions please. 1- PRO FORMA INCOME STATEMENT: At the end of last year, Roberts Inc. reported the following income statement (in millions of
solve these questions please.
1- PRO FORMA INCOME STATEMENT: At the end of last year, Roberts Inc. reported the following income statement (in millions of dollars) Sales $3,000 Operating costs excluding depreciation 2.450 EBITDA $ 350 Deprecation 250 EBIT S 300 Interest 125 EBT S175 Taxes (40%) 70 Net income S 105 Looking abead to the following year, the company's CFO has assembled this information: Year-end sales are expected to be 10% higher than the $3 billion in sales generated last year Year-end opctating costs, excluding depreciation, are expected to equal 80% of year end sales Depreciation is expected to increase at the same rate as sales. Interest costs are expected to remain unchanged. The tax rate is expected to remain at 40%. On the basis of that information, what will be the forecast projected for Roberts year-end net income? 2. LONG-TERM FINANCING NEEDED. At year-end 2008, total assets for Ambrose Inc. were $12 million and accounts payable were $375,000. Sales, which in 2008 were $2.5 millia, are expected to increase by 25% in 2009. Total assets and accounts payable are proportional to sales, and that relationship will be maintained that is, they will grow at the same rate as sales. Ambrose typically uses to current liabilities other than accounts payable. Common stock amounted to $425.000 in 2009, and retained earnings were $295,000. Ambrose plans to sell new Comunion stock m the amount of $75,000. The firm's profit margin on sales is 6%; 60% of earnings will be retained a. What was Ambrose's total debt in 2008? b. How much new long-term debt financing be needed in 2009? (Hint: EFN-New stock =New long-term debt.) 3. Gladiators Refinishers currently has $22,500 in sales and is operating at 45 percent of the firm's capacity. What is the full capacity level of sales? 4. The Corner Store has $219,000 of sales and $187,000 of total assets. The firm is operating at 87 percent of capacity. What is the capital intensity ratio at full capacity? S. Frasier Cabinets wants to maintain a growth rate of 5 percent without incurring any additional equity financing. The firm maintains a constant debt- equity ratio of .0.55, a total asset turnover ratio of 1.30, and a profit margin of 9.0 percent. What must the dividend payout ratio be? 6. You've collected the following information about Odyssey, Inc.: Sales =$165,000 Net Income - $14,800 Dividends - $9,300 Total debt - $68,000 Total equity - $51,000 What is the sustainable growth rate for the company? If it does grow at this rate, how much new borrowing will take place in the coming year, assuming a constant debt-equity ratlo? What growth rate could be supported with no outside financing at allStep by Step Solution
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