Question
The following information is available for a company. Set up the income statement and balance sheet for 2007, then forecast the income statement and balance
The following information is available for a company. Set up the income statement and balance sheet for 2007, then forecast the income statement and balance sheet for 2008, assuming sales grow by 15%
During 2008 the company is going to buy a $300,000 machine, depreciated SL over 6 years. It will do its financing for next year using bonds that have a coupon rate of 8%. It pays $100,000 a year on its long term debt.
*On Excel and show formulas.
| 2007 | 2008 |
Additional Financing Necessary |
|
|
Dividends (30% payout) |
|
|
Taxable Income |
|
|
Depreciation | $50,000 |
|
Cash | $175,000 |
|
Accruals | $50,000 |
|
Raw material | $400,000 |
|
Curr. Assets |
|
|
LTD at 10% | $600,000 |
|
Labor | $312,500 |
|
Accum. Depr. | $475,000 |
|
ST portion of LTD | $100,000 |
|
A/P | $50,000 |
|
TL & NW |
|
|
Operating Costs | $125,000 |
|
A/R | $275,000 |
|
Curr. Liab. |
|
|
GFA | $1,550,000 |
|
Sales | $1,250,000 |
|
Total Assets |
|
|
CS | $480,000 |
|
Interest | $76,000 |
|
Contri. To RE |
|
|
COGS |
|
|
NFA |
|
|
EBIT |
|
|
Other Fixed Costs | $55,000 |
|
Taxes (40%) |
|
|
Gross Profits |
|
|
RE | $425,000 |
|
Inv. | $255,000 |
|
N/P at 8% | $75,000 |
|
After Tax Income |
|
|
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