Forecasted Statements and Ratios Upton Computers makes bulk purcheses of smell computers, stocks them in corveniently loceted warehouses, ships them to its chain of retail stores, and has a stal to advise customer's end help them set up their new computers. Upton's belance sheet as of December 31, 2019, is shown here (millions of dollars): $ 3.5 ocurits peyublu Receivaales 26.0 Notes payable 19.0 Trive torles 58,0 Line of credit 0 Total current assets $ 87,5 Accruas 8.5 Net 'ixed assets 35.0 Total current liabilities $ 35.5 Mortgage loan Carr man stock 15.0 Retained earnings 66.0 Total esses $ $122.5 Total liabilities and equity $:22.5 Sales for 2019 were $400 million and net income for the year was $12 million, so the film's profit margin was 3.0%. Unton pala dividends of $4.8 million to common stockholders, so its payout ratio was 40%. Its tax rate was 2595, and It operates at full capacity. Assure that all asceticales ratios, (spontaneous liabilities/sales repas, the prof: margin, and the payout ratio remain constant in 2020. Do not round intermediate calculations. a. If sales are projected to increase by $100 million, or 25%, during 2020, use tha AFN equation to determine Upton's praracted external capital acuirements. Enter your answers in milliars. For examale, an answer of $10,550,000 should be entered as 10.55. Round your answer to two decimal places $ 11,5 million b. Using the AFN ecuation, determine Upton's self-supporting growth rate. Thesis, what is the meximum growth rate the firm can achieve without heving to employ rionspontaneous external funds? Round your answer to two decimal places. 9 c. Use the forecasted financial statement method to forecast Upton's balance sheet for December 31, 2020. Assume that all additional extemal capital is raised as a line of credit at the end of the year and reflected (because the debt is arded at the end of the year, there will be no auditional interest expense due to the new debt). Assume Uplor's profil men er dividend payout relia will be the same in 2020 45 Liey were in 2019. What is the amount of the line of credit regor lecl on the 2020 forecasted belance sheels? (Hint: You don't need to forecast the Income statements because the line of credit is taken out on the last day of the year and you are given the projected sales, profit margin, and dividend payout ratlo; these figures allow you to calculate the ZOZD addition to retained camings for the balance sheet without actually constructing a full income stsenat.) Enter your arewers in millions. For example, an answer of $10,550,000 should be entered 2. 10.55. Round your answers to two decima places. Upton Computers Pro Forma Balance Sheet December 31, 2020 (Millions of Dollars) Cash $ Receivables $ Inventories $ Total current assets $ Net fixed assets $ Total assets $ X Accounts payable $ $ X Notes payable x Line of credit $ Accruals $ Total current liabilities $ Mortgage loan $ Common stock $ Retained earnings $ Total liabilities and equity $
