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The credit sales are all on credit. What I am looking for is how to start and do this thing. Thank you for your time.
The credit sales are all on credit. What I am looking for is how to start and do this thing. Thank you for your time.
FINANCIAL PLANNING AND GROWTH CONSIDERATIONS Clueless, Inc Balance Sheet at 12/31/2018 (000's) Cash & Marketable Securities 60 Accounts Payable Long-Term Debt 50 293 Accounts Receivable 111 150 Inventories 343 Total Liabilities Common Stock Retained Earnings Total Liabilities and Capital Total Current Assets 321 145 Net Fixed AsSs ets 250 571 83 571 Total Assets Additional considerations Sales for 2018 were $1,000,000; Net Income after Tax = $60,000 Management's estimates for the next years: Sales growth @30% for 2018 Net Income after Taxes estimated at 6% of Sales Proposed Dividend distribution = 40% of after-tax profits Proposed Debt to Assets ratio = 60% Projected Year-End Cash Balance = 6% of Sales Projected Year-End Accounts Receivable Duration = 40 days Projected levels of Inventory = 15% of Sales Projected Accounts Payable levels = 5% of Sales Projected level of Net Fixed Assets = 25% of Sales No projected changes in the levels of Common Stock are proposed Required: Prepare a 2019 projected Income Statement, Balance Sheet and Statement of Cash Flows based on above fact pattern. Identify implications of excessive growth expectations upon capital structure Calculate a more responsible level of growth to avoid financial distres s FINANCIAL PLANNING AND GROWTH CONSIDERATIONS Clueless, Inc Balance Sheet at 12/31/2018 (000's) Cash & Marketable Securities 60 Accounts Payable Long-Term Debt 50 293 Accounts Receivable 111 150 Inventories 343 Total Liabilities Common Stock Retained Earnings Total Liabilities and Capital Total Current Assets 321 145 Net Fixed AsSs ets 250 571 83 571 Total Assets Additional considerations Sales for 2018 were $1,000,000; Net Income after Tax = $60,000 Management's estimates for the next years: Sales growth @30% for 2018 Net Income after Taxes estimated at 6% of Sales Proposed Dividend distribution = 40% of after-tax profits Proposed Debt to Assets ratio = 60% Projected Year-End Cash Balance = 6% of Sales Projected Year-End Accounts Receivable Duration = 40 days Projected levels of Inventory = 15% of Sales Projected Accounts Payable levels = 5% of Sales Projected level of Net Fixed Assets = 25% of Sales No projected changes in the levels of Common Stock are proposed Required: Prepare a 2019 projected Income Statement, Balance Sheet and Statement of Cash Flows based on above fact pattern. Identify implications of excessive growth expectations upon capital structure Calculate a more responsible level of growth to avoid financial distres sStep by Step Solution
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