for 2023 1. Sales Revenue should increase by 2% in 2021; 3% in 2022 and decreased by 3% in 2023 and remains the same on 2024.2. Cost of Sales increased to 4 576 000 in 2021 and increased by 2% for the next TWO years and increased by 1% for the last year of projection.3. Operating Expenses will only increase in 2021 and 2024 by 2%.4. Income Tax Rate is 30%.2020 (ACTUAL)2021202220232024SALES9 345 2553.10.17.24.LESS: COSTS OF SALES3 445 5544.11.18.25.GROSS PROFIT5 899 7015.12.19.26.20.27.4 140 0006.13.LESS: OPERATINGEXPENSES28.21.14.1 759 7017.29.NIBT22.15.1.527910.38.30.23.LESS: INCOME TAX16.9.2.1231790.7NIAT

Projected Income Statement is the a snapshot of Estimated Sales, Cost of Sales, Operating Expenses…

Answered: 1. Sales Revenue should increase by 2%…

Entrepreneurial Finance

6th Edition

ISBN:9781337635653

Author:Leach

Publisher:Leach

Chapter4A: Nopat Breakeven: Revenues Needed To Cover Total Operating Costs

Section: Chapter Questions

Problem 1EP

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Broussard Skateboard’s sales are expected to increase by 15% from $8 million in 2018 to $9.2 million in 2019. Its assets totaled $5 million at the end of 2018. Broussard is already at full capacity, so its assets must grow at the same rate as projected sales. At the end of 2018, current liabilities were $1.4 million, consisting of $450,000 of accounts payable, $500,000 of notes payable, and $450,000 of accruals. The after-tax profit margin is forecasted to be 6%, and the forecasted payout ratio is 40%. Use the AFN equation to forecast Broussard’s additional funds needed for the coming year.
Financing Deficit Stevens Textile Corporation’s 2018 financial statements are shown here: Balance Sheet as of December 31, 2018 (Thousands of Dollars) Income Statement for December 31, 2018 (Thousands of Dollars) Suppose 2019 sales are projected to increase by 15% over 2018 sales. Use the forecasted financial statement method to forecast a balance sheet and income statement for December 31, 2019. The interest rate on all debt is 10%, and cash earns no interest income. Assume that all additional debt in the form of a line of credit is added at the end of the year, which means that you should base the forecasted interest expense on the balance of debt at the beginning of the year. Use the forecasted income statement to determine the addition to retained earnings. Assume that the company was operating at full capacity in 2018, that it cannot sell off any of its fixed assets, and that any required financing will be borrowed as notes payable. Also, assume that assets, spontaneous liabilities, and operating costs are expected to increase by the same percentage as sales. Determine the additional funds needed. What is the resulting total forecasted amount of the line of credit? In your answers to parts a and b, you should not have charged any interest on the additional debt added during 2019 because it was assumed that the new debt was added at the end of the year. But now suppose that the new debt is added throughout the year. Don’t do any calculations, but how would this change the answers to parts a and b?
Prepare a projected statement of comprehensive income for the year ended 31 December 2021 to determine the sales needed to produce a profit after tax that is 25% more than that for the year ending 31 December 2020.(Where applicable round of amounts to the nearest rand) INFORMATION:Calder EnterprisesStatement of Comprehensive Income for the year ended 31 December 2020 Additional information:1. Cost of sales is expected to be 60% of sales.2. Operating expenses will increase by 4%.3. Interest expense will increase to R120 000.4. The tax rate will remain at 28%3.2 Use the information from question 3.1 (not your solution) and calculate the following for the year ending 31 December 2020:3.2.1 Gross margin 3.2.2 Net profit margin 3.2.3 Operating margin 3.2.4 Interest coverage
1. In the year 2020, Metro Corporation expects an increase of 25% in cost of sales as compared to cost of sales in 2019 of RM135,000. Sales in 2019 is RM 225,000. Operating expenses for 2019 of RM23,000 will increase by 5% while interest on loans (RM4,000) and depreciation (RM15,000) remains. Tax rate is 25%.a) Prepare an income statement for Metro Corporation for the year ended June 31, 2019.b) How much is the revenues/sales for 2020 if Metro Corporation wants to reach breakeven based on :- EBDAT?- NOPAT?c) Refering to question in section b), state the difference of the two breakeven revenues above in RM.d) If a product offered by Metro Corporation is sold at RM1,125 per unit, how many quantity should be sold to breakeven based on:- EBDAT?- NOPAT?
Suppose that the Sales in December 2019 were 64,566. The sales are expected to grow by 6% in January 2020, by 17% in February 2020, and by 10% in March 2020. After that, the sales are expected to grow by 14%. The purchases are 10% of sales. The purchases will be paid in the same month. The general administrative expenses are $13,032 and will be paid in the same month. The depreciation expense is $6,611 per month. The interest expenses are $8,778 per quarter and will be paid in March, June, September, and December. What is the cash outflow for June, 2020?
Question: How much is the income or loss after tax for 2021? Kindly prepare a good presentation of your computation. The store opened on January 01, 2021 and had total sales for the 1st month of Php 300,000.00. Corresponding increase in sales of 10% was realized for the remaining months of the 1st quarter. Second quarter sales were the same as the 1stquarter, corresponding 5% increase for the 3rd quarter, and 4thquarter sales is the same as the 1st quarter. The company had a miscellaneous income for the year of Php 50,000.00 but it seems that it has no effect on its financial since they also incurred the same amount for the spoilages, considered as other expense. Let us assume that the annual tax percentage will be 12%. Sales breakdown is: 70% from the beverages and the remaining percentage for the pastry line. Total investment of Ms. Cortesi amounted to Php1.5M and she is expecting the Payback Period on the 3rd year. Renovation cost of the rented space of the store amounted to Php…
Additional Information: (a) Gross profit rate for 2019 is 50%, which decreased by 5% in 2020 due to increase in cost to produce their products. (b) Income tax rate is 40%. What is the operating expense in 2020? ₱525,000 ₱183,333 ₱126,923 ₱150,000
The most recent financial statements for Crosby, Incorporated, follow. Sales for 2021 are projected to grow by 30 percent. Interest expense will remain constant; the tax rate and the dividend payout rate will also remain constant. Costs, other expenses, current assets, fixed assets, and accounts payable increase spontaneously with sales. CROSBY, INCORPORATED 2020 Income Statement Sales $ 749,000 Costs 584,000 Other expenses 20,000 Earnings before interest and taxes $ 145,000 Interest paid 16,000 Taxable income $ 129,000 Taxes (21%) 27,090 Net income $ 101,910 Dividends $ 31,592 Addition to retained earnings 70,318 CROSBY, INCORPORATED Balance Sheet as of December 31, 2020 Assets Liabilities and Owners’ Equity Current assets Current liabilities Cash $ 20,840 Accounts payable $ 55,000 Accounts receivable 43,780 Notes payable 14,200 Inventory 93,960 Total $ 69,200…
Assume that today is December 31, 2019, and that the following information applies to Abner Airlines: After-tax operating income [EBIT(1 - T)] for 2020 is expected to be $650 million. The depreciation expense for 2020 is expected to be $120 million. The capital expenditures for 2020 are expected to be $500 million. No change is expected in net operating working capital. The free cash flow is expected to grow at a constant rate of 7% per year. The required return on equity is 16%. The WACC is 9%. The firm has $199 million of non-operating assets. The market value of the company's debt is $4.177 billion. 250 million shares of stock are outstanding. Using the corporate valuation model approach, what should be the company's stock price today? Do not round intermediate calculations. Round your answer to the nearest cent. $ ?
The most recent financial statements for Crosby, Incorporated, follow. Sales for 2021 are projected to grow by 25 percent. Interest expense will remain constant; the tax rate and the dividend payout rate will also remain constant. Costs, other expenses, current assets, fixed assets, and accounts payable increase spontaneously with sales. CROSBY, INCORPORATED 2020 Income Statement Sales $ 755,000 Costs 611,000 Other expenses 25,000 Earnings before interest and taxes $ 119,000 Interest paid 10,800 Taxable income $ 108,200 Taxes (22%) 23,804 Net income $ 84,396 Dividends $ 31,840 Addition to retained earnings 52,556 CROSBY, INCORPORATED Balance Sheet as of December 31, 2020 Assets Liabilities and Owners’ Equity Current assets Current liabilities Cash $ 24,440 Accounts payable $ 58,200 Accounts receivable 33,780 Notes payable 15,200 Inventory 70,700 Total $ 73,400…
Anusha Berhad’s sales pattern for the first quarter 2021 and projected revenues are as follows: Additional information:i. Historically, Anusha Berhad’s sales were on cash basis.ii. Anusha purchase raw material two month before the sales month and paid in cash equal to 60 percent of its sales.iii. Fixed monthly rent of RM11,000.iv. A depreciation expense is RM400 per month.v. Dividend of RM3,000 will be received at the end of each quarter.vi. Wages and salaries are estimated RM15,000 per month.vii. Anusha decide to repay RM40,000 of their loan on April.viii. Interest on accumulated loan is at 9 percent annual interest and paid in the following month.ix. Ending cash balance for the budget period is RM20,000 and it would like to maintain minimum desired balance of RM20,000 per month. Prepare a monthly cash budget for the first quarter 2021 for Anusha Berhad.
ssume that today is December 31, 2018, and that the following information applies to Abner Airlines: After-tax operating income [EBIT(1 - T)] for 2019 is expected to be $500 million. The depreciation expense for 2019 is expected to be $180 million. The capital expenditures for 2019 are expected to be $400 million. No change is expected in net operating working capital. The free cash flow is expected to grow at a constant rate of 6% per year. The required return on equity is 15%. The WACC is 10%. The firm has $200 million of non-operating assets. The market value of the company's debt is $3.096 billion. 340 million shares of stock are outstanding. Using the corporate valuation model approach, what should be the company's stock price today? Do not round intermediate calculations. Round your answer to the nearest cent. $

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