Question
The latest income statement, balance sheet and other related information for Whoozit Company is as follows: Net Sales Revenue = $1,000,000 COGS = $600,000 Operating
The latest income statement, balance sheet and other related information for Whoozit Company is as follows: Net Sales Revenue = $1,000,000 COGS = $600,000 Operating Expenses = $200,000 Interest Expense = $20,000 Tax Expense = $54,000 Addition to Retained Earnings = $88,200 Current Assets = $700,000 Net Fixed Assets = $900,000 Current Liabilities = $200,000 Long Term Debt = $200,000 Common Stock = $300,000 Retained Earnings = $900,000 1. Assuming the same plowback ratio, the proforma addition to retained earnings is $ 2. Assuming 100% capacity usage, the proforma TOTAL assets are $ 3. The proforma current liabilities are $ 4. The proforma retained earnings are $ 5. The External Financing Need is $ 6. Assuming the EFN will be fulfilled by increasing the LTD, the proforma LTD (to balance the balance sheet) is $ 7. With the updated LTD you just calculated, assuming a 10% interest rate, the corrected interest expense (end of first iteration) is $ 8. If the current capacity usage is at 80%, then the proforma net fixed assets are $
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