55. At year-end 2020, total assets for ABC Company were P12,000,000 andaccounts payable were P3,750,000. Sales, which in 2020 were P25,000,000, areexpected to increase by 25% in 2021. Total assets and accounts payable areproportional to sales, and that they will grow at the same rate as sales. ABCtypically uses no current liabilities other than accounts payable. Common stockamounted to P4,250,000 in 2020, and retained earnings were P2,950,000. ABCplans to sell new common stock in the amount of P700,000. The firm's profitmargin on sales is 6%; and 60% of earnings will be retained. How much long-termdebt financing will be needed in 2021? [nearest peso]

Sale in 2016 = ($2500000 x 125 / 100) =3125000Sale in 2015 is given = $2500000Increase in sale in…

Answered: O. Sales, which in 2020 21. Total…

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O. Sales, which in 2020 21. Total assets and acc y will grow at the same other than accounts pa and retained earnings

Fundamentals Of Financial Management, Concise Edition (mindtap Course List)

10th Edition

ISBN:9781337902571

Author:Eugene F. Brigham, Joel F. Houston

Publisher:Eugene F. Brigham, Joel F. Houston

Chapter16: Financial Planning And Forecasting

Section: Chapter Questions

Problem 8P: LONG-TERM FINANCING NEEDED At year-end 2019, total assets for Arrington Inc. were 1.8 million and...

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LONG-TERM FINANCING NEEDED At year-end 2019, total assets for Arrington Inc. were 1.8 million and accounts payable were 450,000. Sales, which in 2019 were 3.0 million, are expected to increase by 25% in 2020. Total assets and accounts payable are proportional to sales, and that relationship will be maintained; that is, they will grow at the same rate as sales. Arrington typically uses no current liabilities other than accounts payable. Common stock amounted to 500,000 in 2019, and retained earnings were 475,000. Arrington plans to sell new common stock in the amount of 130,000. The firms profit margin on sates is 5%; 35% of earnings will be retained. a. What were Arringtons total liabilities in 2019? b. How much new long-term debt financing will be needed in 2020? (Hint: AFN - New stock = New long-term debt.)
Long-Term Financing Needed At year-end 2018, Wallace Landscapings total assets were 2.17 million, and its accounts payable were 560,000. Sales, which in 2018 were 3.5 million, are expected to increase by 35% in 2019. Total assets and accounts payable are proportional to sales, and that relationship will be maintained. Wallace typically uses no current liabilities other than accounts payable. Common stock amounted to 625,000 in 2018, and retained earnings were 395,000. Wallace has arranged to sell 195,000 of new common stock in 2019 to meet some of its financing needs. The remainder of its financing needs will be met by issuing new long-term debt at the end of 2019. (Because the debt is added at the end of the year, there will be no additional interest expense due to the new debt.) Its net profit margin on sales is 5%, and 45% of earnings will be paid out as dividends. a. What were Wallaces total long-term debt and total liabilities in 2018? b. How much new long-term debt financing will be needed in 2019? [Hint: AFN New stock = New long-term debt.)
AFN EQUATION Refer to Problem 16-1 and assume that the company had 3 million in assets at the end of 2019. However, now assume that the company pays no dividends. Under these assumptions, what additional funds would be needed for the coming year? Why is this AFN different from the one you found in Problem 16-1?
At year-end 2019, Waqar Pharma’s total assets were $3.25 million and itsaccounts payable were $890,000. Sales, which in 2019 were $4.5 million, are expectedto increase by 40% in 2020. Total assets and accounts payable are proportional tosales, and that relationship will be maintained. Waqar typically uses no currentliabilities other than accounts payable. Common stock amounted to $925,000 in 2019,and retained earnings were $695,000. Waqar has arranged to sell $295,000 of newcommon stock in 2020 to meet some of its financing needs. The remainder of itsfinancing needs will be met by issuing new long-term debt at the end of 2020.(Because the debt is added at the end of the year, there will be no additional interest expense due to the new debt.) Its net profit margin on sales is 6.5%, and 40% ofearnings will be paid out as dividends. Required (a.) What were Waqar’s total long-term debt and total liabilities in 2019? (b.) How much new long-term debt financing will be needed in 2020?…
At year-end 2020, RWD Inc.’s total assets were $1.2 million and its accounts payable were $375,000. Sales, which in 2020 were $2.5 million, are expected to increase by 25% in 2021. Total assets and accounts payable are proportional to sales, and that relationship will be maintained. RWD typically uses no current liabilities other than accounts payable. Its profit margin on sales is 6%, and 40% of earnings will be paid out as dividends. Determine the amount of AFN for year 2021.
At year-end 2020, RWD Inc.’s total assets were $1.2 million and its accounts payable were $375,000. Sales, which in 2020 were $2.5 million, are expected to increase by 25% in 2021. Total assets and accounts payable are proportional to sales, and that relationship will be maintained. RWD typically uses no current liabilities other than accounts payable. Its profit margin on sales is 6%, and 40% of earnings will be paid out as dividends. Determine the amount of AFN for year 2021. Calculate earnings per share (EPS) for CVN and TPO for year 2020 and each of the next 6 years if CVNacquires TPO at a ratio of exchange of 1.3. Describe the initial effect and long run effect on EPS of CVN and TPO. Does merger look beneficial forCVN and TPO? Why or why not?
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At year-end 2018, total assets for Arrington Inc. were$1.8 million and accounts payable were $450,000. Sales, which in 2018 were $3.0 million,are expected to increase by 25% in 2019. Total assets and accounts payable are proportionalto sales, and that relationship will be maintained; that is, they will grow at the same rate assales. Arrington typically uses no current liabilities other than accounts payable. Commonstock amounted to $500,000 in 2018, and retained earnings were $475,000. Arrington plansto sell new common stock in the amount of $130,000. The firm’s profit margin on sales is5%; 35% of earnings will be retained.a. What were Arrington’s total liabilities in 2018?b. How much new long-term debt financing will be needed in 2019?(Hint: AFN - New stock = New long-term debt.)
Ramsay & Bell, Inc. had sales for 2019 of $180,000, and EBITDA was 36% of sales. Furthermore, depreciation was $8,400, interest was $5,760, the corporate tax rate was 21%, and the company pays 10% of its net income as dividends. Given this information and the balance sheets below, calculate the free cash flow for 2019. $24,556 $27,056 $28,556 $30,056 None of the above is within $100 of the correct answer.
At year-end 2019, ABC Inc.’s total assets were $1 million and its accounts payable were $325,000. Sales, which in 2019 were $2 million, are expected to increase by 30% in 2020. Total assets and accounts payable are proportional to sales, and that relationship will be maintained. ABC typically uses no current liabilities other than accounts payable. Common stock amounted to $375,000 in 2019, and retained earnings were $260,000. ABC has arranged to sell $60,000 of new common stock in 2020 to meet some of its financing needs. The remainder of its financing needs will be met by issuing new long-term debt at the end of 2020. (Because the debt is added at the end of the year, there will be no additional interest expense due to the new debt.) Its profit margin on sales is 5%, and 45% of earnings will be paid out as dividends. a. What were ABC’s total long-term debt and total liabilities in 2020?b. How much additional fund needed (AFN) in 2020?
#110 At the beginning of 2020, a business had total liabilities of P1,800,000 and P600,000 of equity. Total assets increased by 25% while the total liabilities remained the same. Contributions made by the owner amounted to P500,000 while the profit amounted to P1,000,000. Determine the amount of withdrawals made by the owner during the year.
The 2Ball's Co's sales are forecasted to double from P1,000,000 in 2020 to P2,000,000 in 2021. The figures in the Dec. 31,2020, balance sheet (in thousands) follows: Current Assets, P500; Net Fixed Assets, P500; Accounts Payable and Accruals, P100; Notes Payable, P150; Long-term debt, P400; Common Stock, P100; Retained Earnings, P250. The 2Balls fixed assets were used to only 50% of capacity in 2020, but its current assets were at their proper level in relation to sales. All assets except fixed assets must increase in the same rate as sales and fixed assets would also have to increase at the same rate if the current excess capacity did not exist. 2Balls' after tax profit margin is forecasted to be 5% and its payout ratio to be 60%. What is 2Balls Co.'s additional fund needed (AFN) for the coming year?