Answered step by step
Verified Expert Solution
Question
...
1 Approved Answer
Start with the partial model in the file Ch 0 9 P 1 0 Build a Model.xlsx , which contains the 2 0 2 1
Start with the partial model in the file Ch P Build a Model.xlsx which contains the financial statements of Zieber Corporation. Forecast Zieber's income statement and balance sheets. Use the following assumptions: Sales grow by The ratios of expenses to sales, depreciation to fixed assets, cash to sales, accounts receivable to sales, inventories to sales, fixed assets to sales, accounts payable to sales, and accruals to sales will be the same in as in Zieber will not issue any new stock or new longterm bonds. The interest rate is for longterm debt, and the interest expense on longterm debt is based on the average balance during the year. No interest is earned on cash. Regular dividends grow at a rate. The tax rate is Calculate the additional funds needed AFN If new financing is required, assume it will be raised by drawing on a line of credit with an interest rate of Assume that any draw 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 new line of credit. If surplus funds are available, pay a special dividend. The data has been collected in the Microsoft Excel file below. Download the spreadsheet and perform the required analysis to answer the questions below. Do not round intermediate calculations. Enter your answers in thousands. For example, an answer of $ thousand should be entered as not Round your answers to two decimal places. If your answer is zero, enter Download spreadsheet Ch P Build a Modelfcaxlsx What are the forecasted levels of the line of credit and special dividends? Hints: Create a column showing the ratios for the current year; then create a new column showing the ratios used in the forecast. Also, create a preliminary forecast that doesn't include any new line of credit or special dividends. Identify the financing deficit or surplus in this preliminary forecast and then add a new column that shows the final forecast that includes any new line of credit or special dividend. Required line of credit $ fill in the blank thousand Special dividends $ fill in the blank thousand Now assume that the growth in sales is only What are the forecasted levels of the line of credit and special dividends? Required line of credit $ fill in the blank thousand Special dividends $ fill in the blank thForecasting Financial Statements Sales growth rate Dividend growth rate Interest rate on longterm debt Interest rate on line of credit Tax rate a Determining the forecasted levels of the line of credit and special dividends Zeiber's Projected Financial Statements Thousands of Dollars Balance Sheets Historical ratios Forecasting basis Input ratios Preliminary forecast doesnt include special dividend or LOC Final forecast includes special dividend or LOC Assets: Cash $ of sales Accounts receivable of sales Inventories of sales Total current assets $ Fixed assets of sales Total assets $ Liabilities and equity Accounts payable $ of sales Accruals of sales Line of credit Zero in preliminary forecast Total current liabilities $ Longterm debt Carry over from previous year Total liabilities $ Common stock Carry over from previous year Retained earnings Previous RE Add. to RE Total common equity $ Total liabilities and equity $ Income Statements Historical ratios Forecasting basis Input ratios Preliminary forecast doesnt include special dividend or LOC Final forecast includes special dividend or LOC Sales $ Growth Expenses excluding depr. & amort. of sales Depreciation and amortization of fixed assets EBIT $ Interest expense on longterm debt Interest rate times Average debt during year Interest expense on line of credit EBT $ Taxes Net income $ Regular common dividends $ Growth Special dividends Zero in preliminary forecast Addition to retained earnings $ Elimination of the Financial Deficit or Surplus Increase in spontaneous liabilities accounts payable and accruals Increase in longterm bonds and common stock Net income in preliminary forecast minus regular common dividends Previous line of credit Increase in financingousand
Start with the partial model in the file Ch P Build a Model.xlsx which contains the financial statements of Zieber Corporation. Forecast Zieber's income statement and balance sheets. Use the following assumptions: Sales grow by The ratios of expenses to sales, depreciation to fixed assets, cash to sales, accounts receivable to sales, inventories to sales, fixed assets to sales, accounts payable to sales, and accruals to sales will be the same in as in Zieber will not issue any new stock or new longterm bonds. The interest rate is for longterm debt, and the interest expense on longterm debt is based on the average balance during the year. No interest is earned on cash. Regular dividends grow at a rate. The tax rate is
Calculate the additional funds needed AFN If new financing is required, assume it will be raised by drawing on a line of credit with an interest rate of Assume that any draw 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 new line of credit. If surplus funds are available, pay a special dividend.
The data has been collected in the Microsoft Excel file below. Download the spreadsheet and perform the required analysis to answer the questions below. Do not round intermediate calculations. Enter your answers in thousands. For example, an answer of $ thousand should be entered as not Round your answers to two decimal places. If your answer is zero, enter
Download spreadsheet Ch P Build a Modelfcaxlsx
What are the forecasted levels of the line of credit and special dividends? Hints: Create a column showing the ratios for the current year; then create a new column showing the ratios used in the forecast. Also, create a preliminary forecast that doesn't include any new line of credit or special dividends. Identify the financing deficit or surplus in this preliminary forecast and then add a new column that shows the final forecast that includes any new line of credit or special dividend.
Required line of credit $ fill in the blank
thousand
Special dividends $ fill in the blank
thousand
Now assume that the growth in sales is only What are the forecasted levels of the line of credit and special dividends?
Required line of credit $ fill in the blank
thousand
Special dividends $ fill in the blank
thForecasting Financial Statements
Sales growth rate
Dividend growth rate
Interest rate on longterm debt
Interest rate on line of credit
Tax rate
a Determining the forecasted levels of the line of credit and special dividends
Zeiber's Projected Financial Statements
Thousands of Dollars
Balance Sheets Historical ratios Forecasting basis Input ratios Preliminary forecast doesnt include special dividend or LOC Final forecast includes special dividend or LOC
Assets:
Cash $ of sales
Accounts receivable of sales
Inventories of sales
Total current assets $
Fixed assets of sales
Total assets $
Liabilities and equity
Accounts payable $ of sales
Accruals of sales
Line of credit Zero in preliminary forecast
Total current liabilities $
Longterm debt Carry over from previous year
Total liabilities $
Common stock Carry over from previous year
Retained earnings Previous RE Add. to RE
Total common equity $
Total liabilities and equity $
Income Statements Historical ratios Forecasting basis Input ratios Preliminary forecast doesnt include special dividend or LOC Final forecast includes special dividend or LOC
Sales $ Growth
Expenses excluding depr. & amort. of sales
Depreciation and amortization of fixed assets
EBIT $
Interest expense on longterm debt Interest rate times Average debt during year
Interest expense on line of credit
EBT $
Taxes
Net income $
Regular common dividends $ Growth
Special dividends Zero in preliminary forecast
Addition to retained earnings $
Elimination of the Financial Deficit or Surplus
Increase in spontaneous liabilities accounts payable and accruals
Increase in longterm bonds and common stock
Net income in preliminary forecast minus regular common dividends
Previous line of credit
Increase in financingousand
Step by Step Solution
There are 3 Steps involved in it
Step: 1
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-text-image.webp)
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Step: 3
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started