Finance

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Plant Improvements Total Investments: total investment in plant and equipment brought forward from the Production spreadsheet. Sales of Plant and Equipment : total sales of plant and equipment brought foraad from the Production spreadsheet. Common Stock * Shares Outstanding: The number of shares of common stock in the hands of shareholders. Reflect any issue/ retire stock transaction at the beginning of this year * Price Per Share: stock price as of yesterday’s close. Stock will be issued or retired at this price. * Earnings Per Share: this year’s projected earnings per share, defined as proforma profits divided by common shares: * Max Stock Issue: The dollar value of new shares your board of directors has authorized…show more content…
(i.e. The amount you wish to borrow.) Transactions take place on January 1. Bonds are issued at the "Long term interest rate". You cannot issue more than the "Maximum issue this year". * Long Term Interest Rate: The interest rate you will pay on bonds issued this year. Bonds are 10-year coupon notes, meaning that you pay the interest each year for the next 10 years, then repay the principal. Bond rates are driven by the prime rate and by your Leverage (Assets/Equity) ratio. The higher the ratio, the more risk you present, and the higher the interest rate * Maximum Issue This Year: The upper limit on bonds (long term debt) that you can issue this year. Bondholders examine Fixed Assets and your Leverage (Assets/Equity ratio) to determine a funding limit. In general, bondholders are interested in funding plant and equipment. They fund up to 80% of last year’s Fixed Assets. However, as your Leverage increases, they become concerned and typically refuse additional funding as Leverage exceeds 4.0. Outstanding Bonds * Series Number: The number that identifies the bond issue. The first 3 digits are the interest rate. The "S" stands for "series". The last 2 digits are the year in which the bond is due. "12.5S2005" identifies bonds that are due December 31, 2005 and pay an interest rate of 12.5%. * Face Amount: The face amount or principal of the bonds. This amount is repaid when the bond matures. Until that year, you

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