Start with the partial model in the file Chop P10 Build Modelsx/sx on the textbook's Web site, which contain the 2018 financial statements of Zieber Corporation. Forecast Zolber's 2019 income statement and balance sheets. Use the following assumptions: (1) Sales grow by 6%. 2) The ration of expenses to sales, depreciation to fixed assets, cash to sales, accounts receivable to sales, and eventories to sales will be the same in 2019 as in 2018. (3) Zeiber will not issue any new stock or now long-term bonds (4) The interest rate is 11% for long-term debt and the Interest expense on long-term debt is based on the average balance during the year. (5) No interestis earned on cash (6) Regular dividends grow at an 8% rate (6) Calculate the additional funds needed (AFN). It new financing is required, assure it will be raised by drawing on a line of credit with an interest rate of 12%. 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 Key Input Data: Used in the forecast 40% Tax rate Dividend growth rate Rate on notes payable-torm debt, rstd Rate on long-term debt, rd Rate on line of credit, LOC 8% 9% 11% 12% Wat are the forecasted levels of the line of credit and special dividends ? (Hinta: Create a column showing the ration for the current years 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 creditor 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.) Begin by calculating the appropriate historical ratios in Column E. Then put these ration and any other input ratlos in Column G. forecast the preliminary balance sheets and income statements in Column H. Don't include any line of credit or special dividend in the preliminary recast After completing the preliminary forecast of the balance sheets and income intent go to the area below the preliminary forecast and Identity the Anuncing deficit or surplus Thone Excel Fatutements to specly the amount of any new line of credit OR upecial dividend you should not have now line of credit AND a special dividend, only one of the other Ater specifying the amounts of the special dividend or line of credit create a second column for the final forecast next to the color for the preliminary forecastIn this final forecast be sure to include the effect of the special dividend or line of credit. 2018 Historical ratios 2019 Preliminary 2019 Inout forecast doesn't include ratio special dividend or LOC) 2019 Final forecast includes special dividend or LOCI Income Statements: (December 31, in thousands of dollars)
