Tinberg Cans expects sales next year to be $50,000,000. Inventory and accounts receivable (combined) will increase $8,000,000 to accommodate this sales level. The company has a profit margin at 6%. Its dividend payout is 30% of profit. How much external financing will the firm have to seek? Assume there is no increase in liabilities other than that which will occur with the external financing.

Q: The Fierro Corporation has annual credit sales of $6 million.  Current expenses for the collection…

A: Calculation of Incremental profit after tax using excel is as follows:

Q: Kelly expects its sales to be $20 million this year under its current credit policy.  The present…

A: Given:

Q: Zycad has sales of $110 million a year. If Zycad reduces their processing float by 3 days, what is…

A: The computation of increase in firm’s average cash balance is as follows:

Q: Use the percentage of sales forecasting method to compute the additional financing needed by…

A: Note: All assets, except “cash,” are expected to vary proportionately with sales. Of total…

Q: The Leap Corporation expects next year’s net income to be P15 million. The firm’s debt ratio is…

A: Dividend means the amount given to shareholder of the company as profit distribution by company.…

Q: What are Magnum's total financing needs (that is, total assets) for the coming year?

A: Total financing needs (total assets) refers to the total amount of capital required for the company…

Q: The Nelson Company has $840,000 in current assets and $400,000 in current liabilities. Its initial…

A: Current ratio = Current Assets / Current Liabilities Quick ratio = ( Current Assets - Inventory ) /…

Q: Employees at JPGR Inc have been busy evaluating a potential new $9 million investment for their firm…

A: Net present value (NPV) is the value of all the cash flow of the investment (positive and negative)…

Q: Use the percentage of sales forecasting method to compute the additional financing needed by…

A:

Q: The Retail Company currently has assets of P3,000,000 and accounts payable of P200,000. The firm's…

A: External Funds Needed is calculated with the help of following formula  External Funds Needed =…

Q: The net income is RO 20 million. Last year's sales were RO 180 million. The total assets represent…

A: External Financing needed = (Assets/Sales) x (Δ Sales) - (Spon lIab/Sales ) x (Δ Sales) - (PM x FS)…

Q: Use the percentage of sales forecasting method to compute the additional financing needed by…

A: Additional financing needed  = Total funds needed  - additional  retained earnings

Q: Negus Enterprises has an inventory conversion period of 50 days, an average collection period of 35…

A: The cash conversion cycle is a tool that is used by the companies to find the number of days…

Q: Williams & Sons last year reported sales of $73 million, cost of goods sold (COGS) of $60 million,…

A: The inventory turnover ratio has increased which shows that the company is selling the goods…

Q: The Tortuga Corp has annual credit sales of $2.5 million. Current expenses for the collection…

A:

Q: High Inc. has annual sales of P40,000,000 and keeps average inventory of P10,000,000. On average,…

A: The cash conversion cycle is a period of time that expresses how many days it takes a company to…

Q: Friendly Financial has $240 million in consumer loans with an average interest rate of 20 percent.…

A: Corporate Securities means commercial paper, asset backed securities and other obligations of a…

Q: Williams & Sons last year reported sales of $15 million, cost of goods sold (COGS) of $12 million,…

A: Inventory Turnover Ratio : The inventory turnover ratio is the relationship between inventory and…

Q: Roland Company has a new management team that has developed an operating plan to improve upon last…

A: Return on equity - it means company's earnings on equity share capital after deducting all expenses…

Q: Friendly Financial has $190 million in consumer loans with an average interest rate of 15 percent.…

A: Estimated Revenues = Income from Consumer Loan portfolio +Income from home equity loans + Income…

Q: Coastal Packaging’s ROE last year was only 3 percent, but its management has developed a new…

A: We will have to make use of various ratios to figure out our answer.

Q: Antivirus Inc. expects its sales next year to be $3,100,000. Inventory and accounts receivable will…

A: Given, Expected sales next year = $3,100,000 Increase in inventory and accounts = $540,000 Profit…

Q: Sambonoza Enterprises projects its sales next year to be $4 million and expects to earn 5 percent of…

A: The financing requirement is the total funds or capital required by the company.

Q: The management of XYZ Co has annual credit sales of $20 million and accounts receivable of $4…

A: Answer: Collection Period = Accounts Receivable/Credit Sales × 365 days Put the values in the…

Q: The white oak company's annual sales are 219 million van average of 9 days elapses between when a…

A: GIVEN   The white oak company's annual sales are 219 million van average of 9 days elapses between…

Q: Awkward Inc. currently has $2,145,000 in current assets and $858 in current liabilities. The…

A: Inventory management alludes to the method involved with requesting, putting away, utilizing, and…

Q: Sambonoza Enterprises projects its sales next year to be $4 million and expects to earn 5 percent of…

A: The financial requirement is the total funds or capital needed by the organization to financed the…

Q: Williams & Sons last year reported sales of $39 million, cost of goods sold (COGS) of $30 million,…

A: Inventory turnover ratio can be calculated by cost of goods sold divided by average inventory.

Q: In year​ 1, AMC will earn $2,900 before interest and taxes. The market expects these earnings to…

A: The capital asset pricing model (CAPM) Expected returns  is calculated under Capital Asset pricing…

Q: Kelly expects its sales to be $20 million this year under its current credit policy.  The present…

A: Expected  sales= $20 million Present terms= net 30 days  days of sales outstanding= 65 days bad debt…

Q: The free cash flow to the firm is reported as $300 million. The interest expense to the firm is $30…

A: Information povided

Q: In year​ 1, AMC will earn $2,900 before interest and taxes. The market expects these earnings to…

A: Free cash flow to equity (FCFE): It is  the fund  generated by  business available to be potentially…

Q: A start-up company expects to spend $100,000 the first year for advertising, with amounts decreasing…

A: Equivalent annual worth is the annual worth of all the cash flows received/ paid during a project.…

Q: Distribution Limited projects sales next year to be $4 million and expects to earn 5% of that amount…

A: Assets is the resource that generates that generates potential benefits in the future for any…

Q: You’ve collected the following information about Odyssey, Inc.: Sales =$165,000 Net income = $14,800…

A: Given information: Sales is $165,000 Net income is $14,800 Dividends is $9,300 Total debt $68,000…

Q: The company has sales of $ 10 million per year, all of which are from credit terms that require…

A: The average number of days that is taken by the company to recover its sales payment or its accounts…

Q: Compute the projected after-tax operating cash flow for Steber during the coming year. E

A: Operating Cash Flows: Operating cash flows represent the cash generated by the firm from its normal…

Q: 3. Margetis Inc. carries an average inventory of $750,000. Is annual sales are S10 million, its cost…

A: Cash conversion cycle (CCC) is the  number of days a firm takes to purchase inventory and convert…

Q: Williams & Sons last year reported sales of $38 million, cost of goods sold (COGS) of $30 million,…

A: Inventory Turnover ratio is the rate at which a company sells and then replaces its inventory in a…

Q: Steber Packaging Inc. expects sales next year of $42 million. Of this total, 40 percent is expected…

A: The annual cash expenditures and inflows associated with a project are represented by net cash flow.…

Conversion Cycle

Conversion cycle is also known as cash cycle or net operating cycle. Conversion cycle refers to how much time a company takes to turn its investments which is done from stock or any other financial resources into cash flows from sales.