The following is the financial statement of Executive Dynamic Mattress for the year ended December 2018. Refer Table 18.2 INCOME STATEMENT, 2018 Revenue cost of goods sold Depreciation EBIT Interest expense Earnings before taxes Taxes (50% of 6) Net income Dividends Reinvested earnings Operating cash flow $ 3,100.0 2,790.2 22.9 $ 287.1 5.7 $ 281.4 140.7 $ 140.7 95.0 $ 45.7 $ 163.6 BALANCE SHEET, YEAR-END 2017 2018 $ 226.0 381.0 $ 607.0 $ 341.0 387.5 $ 728.5 Assets Net working capital Fixed assets Total net assets Liabilities and shareholders' Equity Long-term debt Shareholders' equity Total liabilities and shareholders' equity $ 57.0 550.0 $ 607.0 $ 132.8 595.7 $728.5 BALANCE SHEET, YEAR-END 2018 Sources and Uses of Funds Operating cash flow Increase in working capital Investments in fixed assets Dividends Total uses of cash Required external capital Financial Ratios Debt ratio Interest coverage $ 163.6 115.a 29.4 95. 239.4 75.8 0.2 50.4 Use the revised model to generate a new financial plan for 2021. How would its financial plan change if the dividend payout ratio were cut to 30%? What would be required external financing? (Input all amounts as positive values. Do not round Intermediate calculations. Round "Debt ratlo" to 2 decimal places and other answers to 1 decimal place.) 2017 2019 2020 2021 2022 2018 3,100.0 2,790.0 22.9 287.1 Income Statement Revenue Cost of goods sold Depreciation EBIT Interest expense Earnings before taxes Taxes at 50% Net income Dividends Reinvested earnings 5.7 281.4 140.7 140.7 95.0 45.7 Balance Sheet (year-end) Assets Networking capital Net fixed assets Total assets Liabilities and equity Long-term debt Shareholders' equity Total liab. & share, equity Sources and Uses of Funds Operating cash flow Increase in working capital Investments in fixed assets Dividends Total uses of cash Required external financing Financial Ratios Debt ratio Interest coverage The following is the financial statement of Executive Dynamic Mattress for the year ended December 2018. Refer Table 18.2 INCOME STATEMENT, 2018 Revenue cost of goods sold Depreciation EBIT Interest expense Earnings before taxes Taxes (50% of 6) Net income Dividends Reinvested earnings Operating cash flow $ 3,100.0 2,790.2 22.9 $ 287.1 5.7 $ 281.4 140.7 $ 140.7 95.0 $ 45.7 $ 163.6 BALANCE SHEET, YEAR-END 2017 2018 $ 226.0 381.0 $ 607.0 $ 341.0 387.5 $ 728.5 Assets Net working capital Fixed assets Total net assets Liabilities and shareholders' Equity Long-term debt Shareholders' equity Total liabilities and shareholders' equity $ 57.0 550.0 $ 607.0 $ 132.8 595.7 $728.5 BALANCE SHEET, YEAR-END 2018 Sources and Uses of Funds Operating cash flow Increase in working capital Investments in fixed assets Dividends Total uses of cash Required external capital Financial Ratios Debt ratio Interest coverage $ 163.6 115.a 29.4 95. 239.4 75.8 0.2 50.4 Use the revised model to generate a new financial plan for 2021. How would its financial plan change if the dividend payout ratio were cut to 30%? What would be required external financing? (Input all amounts as positive values. Do not round Intermediate calculations. Round "Debt ratlo" to 2 decimal places and other answers to 1 decimal place.) 2017 2019 2020 2021 2022 2018 3,100.0 2,790.0 22.9 287.1 Income Statement Revenue Cost of goods sold Depreciation EBIT Interest expense Earnings before taxes Taxes at 50% Net income Dividends Reinvested earnings 5.7 281.4 140.7 140.7 95.0 45.7 Balance Sheet (year-end) Assets Networking capital Net fixed assets Total assets Liabilities and equity Long-term debt Shareholders' equity Total liab. & share, equity Sources and Uses of Funds Operating cash flow Increase in working capital Investments in fixed assets Dividends Total uses of cash Required external financing Financial Ratios Debt ratio Interest coverage
