The Optical Scam Company has forecast a sales growth rate of 20 percent for next year. The current financial statements are shown here: Income Statement Sales $ 31,800,000 Costs 27,003,300 _______________________________________
Fin-Acc-BossThe Optical Scam Company has forecast a sales growth rate of 20 percent for next year. The current financial statements are shown here: |
Income Statement | ||||
Sales |
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| $ | 31,800,000 |
Costs |
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| 27,003,300 |
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Taxable income |
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| $ | 4,796,700 |
Taxes |
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| 1,678,845 |
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Net income |
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| $ | 3,117,855 |
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Dividends | $ | 1,247,142 |
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Addition to retained earnings |
| 1,870,713 |
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Balance Sheet | |||||||
Assets |
| Liabilities and Equity |
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Current assets | $ | 7,340,000 |
| Short-term debt | $ | 5,088,000 |
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| Long-term debt |
| 2,345,250 |
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Fixed assets |
| 19,372,000 |
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| Common stock | $ | 5,924,750 |
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| Accumulated retained earnings |
| 13,354,000 |
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| Total equity | $ | 19,278,750 |
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Total assets | $ | 26,712,000 |
| Total liabilities and equity | $ | 26,712,000 |
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a. | Calculate the external financing needed for next year. (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) |
External financing needed | $ [removed] |
b-1. | Prepare the firm’s pro forma balance sheet for next year. (Do not round intermediate calculations and round your answers to the nearest whole number, e.g., 32.) |
Balance Sheet | |||
Assets |
| Liabilities and equity |
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Current assets | $ [removed] | Short-term debt | $ [removed] |
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| Long-term debt | [removed] |
Fixed assets | [removed] |
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| Common stock | $ [removed] | |
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| Accumulated retained earnings | [removed] |
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| Total equity | [removed] |
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Total assets | $ [removed] | Total liabilities and equity | $ [removed] |
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b-2. | Calculate the external financing needed. (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) |
External financing needed | $ [removed] |
c. | Calculate the sustainable growth rate for the company based on the current financial statements. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) |
Sustainable growth rate | [removed] % |
10 years ago
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