You have recently been hired as a Finance Manager by FishKing Corp, a major multination corporation, after graduating from Yorkville University with a BBA. You
You have recently been hired as a Finance Manager by FishKing Corp, a major multination corporation, after graduating from Yorkville University with a BBA. You got this job as a result of being a very ethical student who never cheated on any mid term exam.
The following is the most recent Statement of Comprehensive Income for FishKing Corp.
| Sales | $47,000 |
| Cost of Goods | 31,300 |
| Taxable Income | 15,700 |
| Taxes | 5,495 |
| Net Income | $10,205 |
| Dividends | $2,500 |
| Retained Earnings | 7,705 |
The CFO asks you to put together a pro forma statement of comprehensive income for next year projecting a 15% increase in sales. The CFO instructs you to assume that costs will vary with sales and that the dividend payout ratio will remain constant.
- What is the projected addition to retained earnings? Show all your work by completing a proforma Statement of Comprehensive Income.
- If the CFO wants to have $8,000 in addition to Retained Earnings next year, what should the Dividend Payout Ratio be?
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Authors: William O. Cleverley, James O. Cleverley
8th Edition
1284094634, 978-1284094633
