Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Stevens Textile Corporation's 2021 financial statements are shown belaw: Balance Sheet as of Decenber 31,2021 (Thousands of Dollars) Stevens grew rapidy in 2021 and financed

image text in transcribed
image text in transcribed
Stevens Textile Corporation's 2021 financial statements are shown belaw: Balance Sheet as of Decenber 31,2021 (Thousands of Dollars) Stevens grew rapidy in 2021 and financed the growth with netes payable and fong-tem bend. Stavess expects salet to grow by 25 in in the nest year but will finance the growth with a line of credit, not notes payable or long-term bonds. Use the forecasked financal statement method to forecast a baiance sheat and income statement for December 31, 2022. The intarest fate on all debt is 1005 , and cash earns no imerast inconie. The line of credit is added at the end of the year, which ineans that yeu should base the forecasted interest expense on the balance of debt at the beginning of the year. Use the forecasted income statement to determine the adition to retained esmings. Assume that the compaey was operating at full capacity in 2021 , that it cannot sell off any of its fixed atsete, and that attets, bpentaneour liabilitief, and operating costs are expected to increase ty the same percentage as tales. a. What is the projected value for eamings before interest and taxes? Do not round intermediate calculations. Round your answer to the nearest dollar. 5. b. What is the projected value for pre-tax earnings? Do not round intermediate calculations, Round your answer to the nearest dollar: s. c. What is the projected net income? Do not round intermediate calculstions. Round your answer to the nesrest dollat. 5. d. What is the projected addition to retained earnings? Do not round intermediate calculations, Round your answer to the nearest dollar. (5) e. What is the projected value of total current assets? Do not round intermediate caiculations. Round your answer to the nearest doliaf: 5 f. What is the profected value of total assets? Do not round intermediate calcidations. Round your answer to the nearest dolian 5 9. What is the projected sum of accounts payable, accruals, and notes payable? Do not round intermediate calculations. Mound your ansiswer to the nearest dolian. 5 : H. What is the forecauted ine of credit? Do not round intermodiate calculations. Round your answer to the nearest dallaf. 5

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

More Books

Students also viewed these Finance questions

Question

7. What would you need to do to get to the Ideal?

Answered: 1 week ago