Help me answer this thank you Problem 9 (Additional Funds Needed)Hannah Company's sales are forecasted to increase from P1,000 in 20X4 to P2.,000in 20X5. Here is the December 31, 20X4 statement of financial position.Statement of Financial Position(in thousands of pesos)AssetsLiabulities and Stockholders EquiryCash.Accounts receivable.Inventory. .Current assets.Net fixed assets.P 100 Accounts payable .200 Notes payable.200 Accruals..P 500P 50I SOCurrent liabilities500 Long-term debeCommon stock .Retained earnings.Total liabilities andstockholders' equity.P 250400100250Total assets .2L000Hannah's fixed assets were used to only 50 percent of capacity during 20X4, bưtits current assets were at their proper levels. All assets except fixed assets increaseat the same rate as sales, and fixed assets would also increase at the same rate ifthe current excess capacity did not exist. Hannah's after-tax profit margin isforecasted to be 5 percent, and its payout ratio will be 60 percent. What is Hannah'sadditional funds needed (AFN) for the coming ycar?

As the sales of company increases than need for finance also increases so company require additional…

nnah Company's sales are forecasted to increase from P1,000 in 20X4 to P2.C 20x5. Here is the December 31, 20X4 statement of financial position. Statement of Financial Position (in thousands of pesos) Assets Liabilities and Stockholders' Equiny sh. ccounts receivable.. . P 100 Accounts payable.. 200 Notes payable. ......... IS .*.......

nnah Company's sales are forecasted to increase from P1,000 in 20X4 to P2.C 20x5. Here is the December 31, 20X4 statement of financial position. Statement of Financial Position (in thousands of pesos) Assets Liabilities and Stockholders' Equiny sh. ccounts receivable.. . P 100 Accounts payable.. 200 Notes payable. ......... IS .*.......

Financial & Managerial Accounting

13th Edition

ISBN:9781285866307

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter10: Current Liabilities And Payroll

Section: Chapter Questions

Problem 10.23EX

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ADDITIONAL FUNDS NEEDED Morrissey Technologies Inc.s 2016 financial statements are shown here. Morrissey Technologies Inc.: Balance Sheet as of December 31, 2016 Morrissey Technologies Inc.: Income Statement for December 31, 2016 Sales 3,600,000 Operating costs including depredation 3,279,720 EBIT 320,280 Interest 20,280 EBT 300,000 Taxes (40%) 120,000 Net Income 180,000 Per Share Data: Common stock price 45.00 Earnings per share (EPS) 1.80 Dividends per share (DPS) 1.08 Suppose that in 2017, sales increase by 10% over 2016 sales. The firm currently has 100,000 shares outstanding. It expects to maintain its 2016 dividend payout ratio and believes that its assets should grow at the same rate as sales. The firm has no excess capacity. However, the firm would like to reduce its operating costs/sales ratio to 87.5% and increase its total liabilities-to-assets ratio to 30%. (It believes its liabilities-to-assets ratio currently is too low relative to the industry average.) The firm will raise 30% of the 2017 forecasted interest- bearing debt as notes payable, and it will issue long-term bonds for the remainder. The firm forecasts that its before-tax cost of debt (which includes both short- and long-term debt) is 12.5%. Assume that any common stock issuances or repurchases can be made at the firms current stock price of 45. a. Construct the forecasted financial statements assuming that these changes are made. What are the firms forecasted notes payable and long-term debt balances? What is the forecasted addition to retained earnings? b. If the profit margin remains at 5% and the dividend payout ratio remains at 60%, at what growth rate in sales will the additional financing requirements be exactly zero? In other words, what is the firms sustainable growth rate? (Hint: Set AFN equal to zero and solve for g.)
a. (1) Current year working capital. 1,090,000 Current position analysis The following data were taken from the balance sheet of Nilo Company at the end of two recent fiscal years: Current Year Previous Year Current assets: Cash 391,000 300,000 Marketable securities 515,000 354,000 Accounts and notes receivable (net) 634,000 426,000 Inventories 368,000 222,000 Prepaid expenses 182,000 138,000 Total current assets 2,090,000 1,440,000 Current liabilities: Accounts and notes payable (short-term) 725,000 600,000 Accrued liabilities 275,000 300,000 Total current liabilities 1,000,000 900,000 a. Determine for each year (1) the working capital, (2) the current ratio, and (3) the quick ratio. Round ratios to one decimal place. b. What conclusions can be drawn from these data as to the companys ability to meet its currently maturing debts?
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Chasse Building Supply Inc. reported net cash provided by operating activities of $243,000, capital expenditures of $112,900, cash dividends of $35,800, and average maturities of long-term debt over the next 5 years of $122,300. What is Chasses free cash flow and cash flow adequacy ratio? a. $94,300 and 0.77, respectively c. $130,100 and 1.06, respectively b. $94,300 and 0.82, respectively d. $165,900 and 1.36, respectively