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23 4 5 6 7 EN3 Prepare a projected Income statement for 2018 Prepare a projected year-end Balance Sheet for 2018 3. Prepare a projected Cash flow statement for 2018 1. 2. = 9 Assumptions for 2018 based on the company's expansion plans: 8 Cost of goods sold = 43.33% of sales 9 Operating expense = 15% of sales 10 Depreciation = No change, assuming the addition (Purchases) occur at the end of 2018. 11 Repayment of principal (Long-term debt) = $20 12 Cost of borrowing is 10%, stays the same FOR 2018 13 Income tax Tax exp./Pre-tax income = 35% Dividend payout of 20% of EAT (Net Income), 14 15 16 17 18 Inventories 19 Net plant (PP&E) 20 Accounts payable 21 22 Reduce Long-term debt by $20 in the B/S 23 Long-term debt-$20 will be repaid in 2011 Assuming the repayment of $20 will not take place until December 2018, 74 External Fin B/S accounts: Accounts receivable = 23.3% of sales = 28.3% of sales = 30.00% of sales = 41.67% of sales D H

23 4 5 6 7 EN3 Prepare a projected Income statement for 2018 Prepare a projected year-end Balance Sheet for 2018 3. Prepare a projected Cash flow statement for 2018 1. 2. = 9 Assumptions for 2018 based on the company's expansion plans: 8 Cost of goods sold = 43.33% of sales 9 Operating expense = 15% of sales 10 Depreciation = No change, assuming the addition (Purchases) occur at the end of 2018. 11 Repayment of principal (Long-term debt) = $20 12 Cost of borrowing is 10%, stays the same FOR 2018 13 Income tax Tax exp./Pre-tax income = 35% Dividend payout of 20% of EAT (Net Income), 14 15 16 17 18 Inventories 19 Net plant (PP&E) 20 Accounts payable 21 22 Reduce Long-term debt by $20 in the B/S 23 Long-term debt-$20 will be repaid in 2011 Assuming the repayment of $20 will not take place until December 2018, 74 External Fin B/S accounts: Accounts receivable = 23.3% of sales = 28.3% of sales = 30.00% of sales = 41.67% of sales D H

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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23 4 5 6 7 EN3 Prepare a projected Income statement for 2018 Prepare a projected year-end Balance Sheet for 2018 3. Prepare a projected Cash flow statement for 2018 1. 2. = 9 Assumptions for 2018 based on the company's expansion plans: 8 Cost of goods sold = 43.33% of sales 9 Operating expense = 15% of sales 10 Depreciation = No change, assuming the addition (Purchases) occur at the end of 2018. 11 Repayment of principal (Long-term debt) = $20 12 Cost of borrowing is 10%, stays the same FOR 2018 13 Income tax Tax exp./Pre-tax income = 35% Dividend payout of 20% of EAT (Net Income), 14 15 16 17 18 Inventories 19 Net plant (PP&E) 20 Accounts payable 21 22 Reduce Long-term debt by $20 in the B/S 23 Long-term debt-$20 will be repaid in 2011 Assuming the repayment of $20 will not take place until December 2018, 74 External Fin B/S accounts: Accounts receivable = 23.3% of sales = 28.3% of sales = 30.00% of sales = 41.67% of sales D H
Transcribed Image Text:23 4 5 6 7 EN3 Prepare a projected Income statement for 2018 Prepare a projected year-end Balance Sheet for 2018 3. Prepare a projected Cash flow statement for 2018 1. 2. = 9 Assumptions for 2018 based on the company's expansion plans: 8 Cost of goods sold = 43.33% of sales 9 Operating expense = 15% of sales 10 Depreciation = No change, assuming the addition (Purchases) occur at the end of 2018. 11 Repayment of principal (Long-term debt) = $20 12 Cost of borrowing is 10%, stays the same FOR 2018 13 Income tax Tax exp./Pre-tax income = 35% Dividend payout of 20% of EAT (Net Income), 14 15 16 17 18 Inventories 19 Net plant (PP&E) 20 Accounts payable 21 22 Reduce Long-term debt by $20 in the B/S 23 Long-term debt-$20 will be repaid in 2011 Assuming the repayment of $20 will not take place until December 2018, 74 External Fin B/S accounts: Accounts receivable = 23.3% of sales = 28.3% of sales = 30.00% of sales = 41.67% of sales D H
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