Start with the partial model in Ch12 P10 Build a Model.xls x on the textbook's Web site, which contains the 2016 financial statements of Zieber Corporation
(This spreadsheet was kind of a pain cause i couldn't access the webpage and i didnt know if it was important? so i'd appreciate any help)
7/16/15 2 Chapter 3 Problem 4 12 10 Start with the partial model in the file Ch12 P10 Build a Model.xlsx on the textbook's Web site, which contains the 7 2016 financial statements of Zieber Corporation. Forecast Zeiber's 2017 income statement and balance sheets. Use 8 the following assumptions: (1) Sales grow by 6%. (2) The ratios of expenses to sales, depreciation to fixed assets, 9 cash to sales, accounts receivable to sales, and inventories to sales will be the same in 2017 as in 2016. (3) Zeiber 10 will not issue any new stock or new long-term bonds. (4) The interest rate is 11% for long-term debt and the interest 11 expense on long-term debt is based on the average balance during the year. (5) No interest is earned on cash. (6 12 Regular dividends grow at an 8% rate. (6) Calculate the additional funds needed (AFN). If new financing is 13 required, assume it will be raised by drawing on a line of credit with an interest rate of 12%. Assume that any draw 14 on the line of credit will be made on the last day of the year, so there will be no additional interest expense for the 15 new line of credit. If surplus funds are available, pay a special dividend. Used in the forecast 17 Key Input Data: 18 19 Tax rate 20 Dividend growth rate 21 Rate on notes payable-term debt, ft. 22 Rate on long-term debt, r, 23 Rate on line of credit, 24 25 40% 8% 9% 11% 12% a. What are the forecasted levels of the line of credit and special dividends? (Hints: Create a column showing the 26 ratios for the current year; then create a new column showing the ratios used in the forecast. Also, create a 27 preliminary forecast that doesn't include any new line of credit or special dividends. Identify the financing deficit 28 or surplus in this preliminary forecast and then add a new column that shows the final forecast that includes any 29 new line of credit or special dividend 30 31 Begin by calculating the appropriate historical ratios in Column E. Then put these ratios and any other input ratios 32 in Column G 34 Forecast the preliminary balance sheets and income statements in Column H. Don't include any line of credit or 35 special dividend in the preliminary forecast. 7/16/15 2 Chapter 3 Problem 4 12 10 Start with the partial model in the file Ch12 P10 Build a Model.xlsx on the textbook's Web site, which contains the 7 2016 financial statements of Zieber Corporation. Forecast Zeiber's 2017 income statement and balance sheets. Use 8 the following assumptions: (1) Sales grow by 6%. (2) The ratios of expenses to sales, depreciation to fixed assets, 9 cash to sales, accounts receivable to sales, and inventories to sales will be the same in 2017 as in 2016. (3) Zeiber 10 will not issue any new stock or new long-term bonds. (4) The interest rate is 11% for long-term debt and the interest 11 expense on long-term debt is based on the average balance during the year. (5) No interest is earned on cash. (6 12 Regular dividends grow at an 8% rate. (6) Calculate the additional funds needed (AFN). If new financing is 13 required, assume it will be raised by drawing on a line of credit with an interest rate of 12%. Assume that any draw 14 on the line of credit will be made on the last day of the year, so there will be no additional interest expense for the 15 new line of credit. If surplus funds are available, pay a special dividend. Used in the forecast 17 Key Input Data: 18 19 Tax rate 20 Dividend growth rate 21 Rate on notes payable-term debt, ft. 22 Rate on long-term debt, r, 23 Rate on line of credit, 24 25 40% 8% 9% 11% 12% a. What are the forecasted levels of the line of credit and special dividends? (Hints: Create a column showing the 26 ratios for the current year; then create a new column showing the ratios used in the forecast. Also, create a 27 preliminary forecast that doesn't include any new line of credit or special dividends. Identify the financing deficit 28 or surplus in this preliminary forecast and then add a new column that shows the final forecast that includes any 29 new line of credit or special dividend 30 31 Begin by calculating the appropriate historical ratios in Column E. Then put these ratios and any other input ratios 32 in Column G 34 Forecast the preliminary balance sheets and income statements in Column H. Don't include any line of credit or 35 special dividend in the preliminary forecast
