Problem 2:Trody Co., from the previous problem, wants to prepare forecasted financial statements for the year 2015using the percent of sales method, and the below additional given (Round numbers to the nearest dollar):Given forecasted sales of 2015: $6,500b- The tax rate will be 40% in 2015.The company expected to distribute dividends of $750 in 2015.The interest rate on all interest-bearing loans will be 5% annually in 2015.The company is not intending to make changes to its fixed assetsa-C-d-e-1- The forecasted cost of goods sold for 2015 is expected to be:O a) $3,300Ob) $3,738c) $3,000d) $4,250e) None of the above.2- Forecasted fixed expenses amount for 2015 is expected to ber TOJUEHRE ZsBMUqPCOIQg9pNQ4sA3A6UFFh9Hjng/formResponse?pli=1xt20142013Lease expense55.0055.00Plant & Equipment5,170.004,910.00Long term debt3,220.003,122.00Common stock1.550.001,300.00Addition al paid in capital572.00542.00Accumulated depreciation170.00136.00Land350.00270.00Accounts Payable380.00300.00Notes payable44.0025.00Other currenti liabilities242.00211.00Depreciation expense34.0030.00Selling end G&A expenses765.00632.00Seles6,000.004,250.00Cost of goods sold3,300.002,550.00Fixed expenses100.00100.00Interest expense150.00110,00Cash121.0080.00Accounts receivable370.00847.00925.00752.00Inventory758,00723.00Retained earnings35%35%Тax rateA do ENG

The question is related to Ratio Analysis. The cost of goods sold to sales ratio = Cost of goods…

Problem 2: Trody Co., from the previous problem, wants to prepare forecasted financial statements for the year 2015 using the percent of sales method, and the below additional given (Round numbers to the nearest dollar): Given forecasted sales of 2015: $6,500 The tax rate will be 40% in 2015. The company expected to distribute dividends of $750 in 2015. The interest rate on all interest-bearing loans will be 5% annually in 2015. e- The company is not intending to make changes to its fixed assets a- b- C- d- 1- The forecasted cost of goods sold for 2015 is expected to be: " O a) $3,300 O b) $3,738 c) $3,000 O d) $4,250 e) None of the above.

Problem 2: Trody Co., from the previous problem, wants to prepare forecasted financial statements for the year 2015 using the percent of sales method, and the below additional given (Round numbers to the nearest dollar): Given forecasted sales of 2015: $6,500 The tax rate will be 40% in 2015. The company expected to distribute dividends of $750 in 2015. The interest rate on all interest-bearing loans will be 5% annually in 2015. e- The company is not intending to make changes to its fixed assets a- b- C- d- 1- The forecasted cost of goods sold for 2015 is expected to be: " O a) $3,300 O b) $3,738 c) $3,000 O d) $4,250 e) None of the above.

PFIN (with PFIN Online, 1 term (6 months) Printed Access Card) (New, Engaging Titles from 4LTR Press)

6th Edition

ISBN:9781337117005

Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Chapter11: Investment Planning

Section: Chapter Questions

Problem 7FPE

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Stevens Textile Corporations 2019 financial statements are shown here. Stevens grew rapidly in 2019 and financed the growth with notes payable and long-term bonds. Stevens expects sales to grow by 15% in the next year but will finance the growth with a line of credit, not notes payable or long-term bonds. Use the forecasted financial statement method to forecast a balance sheet and income statement for December 31, 2020. The interest rate on all debt is 10%, and cash earns no interest income. The 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 2019, that it cannot sell off any of its fixed assets, and that assets, spontaneous liabilities, and operating costs are expected to increase by the same percentage as sales. a. What is the projected value for earnings before interest and taxes? b. What is the projected value for pre-tax earnings? c. What is the projected net income? d. What is the projected addition to retained earnings? e. What is the projected value of total current assets? f. What is the projected value of total assets? g. What is the projected sum of accounts payable, accruals, and notes payable? h. What is the forecasted line of credit? Balance Sheet as of December 31, 2019 (Thousands of Dollars) Income Statement for December 31, 2019 (Thousands of Dollars)
Using the Value Line Investment Survey report in Exhibit 11.5, find the following information for Apple. What was the amount of revenues (i.e., sales) generated by the company in 2017? What were the latest annual dividends per share and dividend yield? What is the earnings per share (EPS) projection for 2019? How many shares of common stock were outstanding? What were the book value per share and EPS in 2017? How much long-term debt did the company have in the third quarter of 2018?
Forecasted Statements and Ratios Upton Computers makes bulk purchases of small computers, stocks them in conveniently located warehouses, ships them to its chain of retail stores, and has a staff to advise customers and help them set up their new computers. Uptons balance sheet as of December 31, 2018, is shown here (millions of dollars): Sales for 2018 were 350 million, and net income for the year was 10.5 million, so the firms profit margin was 3.0%. Upton paid dividends of 4.2 million to common stockholders, so its payout ratio was 40%. Its tax rate was 40%, and it operated at full capacity. Assume that all assets/sales ratios, (spontaneous liabilities)/sales ratios, the profit margin, and the payout ratio remain constant in 2019. a. If sales are projected to increase by 70 million, or 20%, during 2019, use the AFN equation to determine Uptons projected external capital requirements. b. Using the AFN equation, determine Uptons self-supporting growth rate. That is, what is the maximum growth rate the firm can achieve without having to employ nonspontaneous external funds? c. Use the forecasted financial statement method to forecast Uptons balance sheet for December 31, 2019. Assume that all additional external capital is raised as a line of credit at the end of the year and is reflected (because the debt is added at the end of the year, there will be no additional interest expense due to the new debt). Assume Uptons profit margin and dividend payout ratio will be the same in 2019 as they were in 2018. What is the amount of the line of credit reported on the 2019 forecasted balance sheets? (Hint: You dont need to forecast the income statements because the line of credit is taken out on the last day of the year and you are given the projected sales, profit margin, and dividend payout ratio; these figures allow you to calculate the 2019 addition to retained earnings for the balance sheet without actually constructing a full income statement.)
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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.)
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