Zorg Co's latest financial statements for the year just ended are Sm 21.2 18.3 2.4 2.9 bilities: raft 0.3 ples 2.0 of Zorg Co's inventory is work in progress as most of its production is omer order and minimal levels of raw materials are held. ses from its trade suppliers totalled $16m for the year just ended and on s its suppliers after 45 days, rather than 30 days which is the credit y the suppliers. Purchases and inventory levels grow in line with sales asting its working capital requirements for the next year and the es are expected: sales assets: olvables 0 0.92 1.00 1.87

Zorg Co's latest financial statements for the year just ended are Sm 21.2 18.3 2.4 2.9 bilities: raft 0.3 ples 2.0 of Zorg Co's inventory is work in progress as most of its production is omer order and minimal levels of raw materials are held. ses from its trade suppliers totalled $16m for the year just ended and on s its suppliers after 45 days, rather than 30 days which is the credit y the suppliers. Purchases and inventory levels grow in line with sales asting its working capital requirements for the next year and the es are expected: sales assets: olvables 0 0.92 1.00 1.87

Name: Calculator Scratch PadZorg Co is a specialist tool manufacturer and h
Uploaded: 2024-03-04T10:43:15.000Z
Channel: Bartleby
Description: Calculator Scratch PadZorg Co is a specialist tool manufacturer and has experienced high growth in the pastfew years. Last year's growth in sales volume of 20% is expected to continue into thenext year.Extracts from Zorg Co's latest financial statem

Financial Reporting, Financial Statement Analysis and Valuation

8th Edition

ISBN:9781285190907

Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Chapter10: Forecasting Financial Statement

Section: Chapter Questions

Problem 3QE

See similar textbooks

Similar questions

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.)
Financial leverage MicrosoCortrepotied (MSFT) reported the following data (in millions) for a tern year Compute the profit margin, asset turnover, and financial leverage metrics using the expandedDuPont formula. Round profit margin, asset turnover, and financial leverage to two decimalplaces.Round return on stockholders’ equity to one decimal place.
Problem: Jasper Jewelry has $150 million in sales. The company expects that its sales will increase 4% this year. Jasper's CFO uses a simple linear regression to forecast the company's inventory level for a given level of projected sales. On the basis of recent history, the estimated relationship between inventories and sales (in millions of dollars) is as follows: Inventories = $10 + 0.07(Sales) Given the estimated sales forecast and the estimated relationship between inventories and sales, what is your forecast of the company's year-end inventory level? Enter your answer in millions. For example, an answer of $10,550,000 should be entered as 10.55. Do not round intermediate calculations. Round your answer to two decimal places.
Happy Valley Homecare Suppliers, Incorporated (HVHS), had $13.6 million in sales in 2010. Its cost of goods sold was $5.44 million, and its average inventory balance was $1.67 million. a. Calculate the average number of days inventory outstanding ratios for HVHS. b. The average number of inventory days in the industry is 73 days. By how muchmust HVHS reduce its investment in inventory to improve its inventory days to meet the industry? (Hint: Use a 365-day year.)