The whole year income statement and end of year balance sheet numbers are provided for 2020. As CFO, you are to forecast 2021 numbers (blank column) based on the following assumptions: Balance sheet Income statement ($ million) ($ million) Current Sales 1,000 390 Debt 585 assets Fixed Costs 850 1,560 Equity 1,365 ? assets Total Net income 150 1,950 Total 1,950 assets Sales, assets and costs are expected to grow by 18% in 2021. The company is expected to pay NO dividend in 2021, and will keep the debt level unchanged. Part 1 Attempt 1/1 for 10 pts. In the forecast, which of the following financial ratios are assumed unchanged throughout 2020-2021? Must select ALL to earn points. Check all that apply: accounts receivable turnover profit margin ROE debt-equity ratio total asset turnover gross profit margin Part 2 Attempt 1/2 for 10 pts. Is the 18% growth feasible without external equity financing? If not, what is EFN for year 2021? 0+ decimals Submit Part 3 Attempt 1/2 for 10 pts. If EFN is NOT funded, compute the growth rate the firm can achieve in 2021. 4+ decimals Submit Attempt 1/2 for 10 pts. Part 4 As a check-up on the rate you just computed, fill the projected 2021 numbers based on the scenario in Part 3. What do you fill in for end of 2021 Equity balance? 0+ decimals Submit The whole year income statement and end of year balance sheet numbers are provided for 2020. As CFO, you are to forecast 2021 numbers (blank column) based on the following assumptions: Balance sheet Income statement ($ million) ($ million) Current Sales 1,000 390 Debt 585 assets Fixed Costs 850 1,560 Equity 1,365 ? assets Total Net income 150 1,950 Total 1,950 assets Sales, assets and costs are expected to grow by 18% in 2021. The company is expected to pay NO dividend in 2021, and will keep the debt level unchanged. Part 1 Attempt 1/1 for 10 pts. In the forecast, which of the following financial ratios are assumed unchanged throughout 2020-2021? Must select ALL to earn points. Check all that apply: accounts receivable turnover profit margin ROE debt-equity ratio total asset turnover gross profit margin Part 2 Attempt 1/2 for 10 pts. Is the 18% growth feasible without external equity financing? If not, what is EFN for year 2021? 0+ decimals Submit Part 3 Attempt 1/2 for 10 pts. If EFN is NOT funded, compute the growth rate the firm can achieve in 2021. 4+ decimals Submit Attempt 1/2 for 10 pts. Part 4 As a check-up on the rate you just computed, fill the projected 2021 numbers based on the scenario in Part 3. What do you fill in for end of 2021 Equity balance? 0+ decimals Submit
