At the end of last year, Roberts Inc. reported the following income statement (in millions of dollars):Sales$3,000Operating costs excluding depreciation2,450EBITDA$550Depreciation250EBIT$300InterestEBTTaxes (25%)124$176Net income44$132Looking ahead to the following year, the company's CFO has assembled this information:Year-end sales are expected to be 12% higher than the $3 billion in sales generated last year..Year-end operating costs, excluding depreciation, are expected to equal 70% of year-end sales.Depreciation is expected to increase at the same rate as sales.Interest costs are expected to remain unchanged.■ The tax rate is expected to remain at 25%.On the basis of that information, what will be the forecast for Roberts' year-end net income? Enter your answer in millions. For example, an answer of $25,400,000 should be entered as 25.40. Do not round intermediatecalculations. Round your answer to two decimal places.$million

To forecast Roberts Inc.'s year-end net income, let's calculate the relevant figures based on the…

Answered: At the end of last year, Roberts Inc.…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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he total revenue numbers over the past 4 years for Tag-It Corporation were as follows (values in millions):73,78569,49575,35671,879Determine whether you think Tag-It can hit the target of a 12% increase in sales next year.
Jace Furnishings has $325 million in sales. The company expects that its sales will increase 8% this year. Jace'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 = $30 + 0.105(Sales) Given the estimated sales forecast and the estimated relationship between inventories and sales, what are your forecasts of the company's year-end inventory level? Write out your answer completely. For example, 5 million should be entered as 5,000,000. Do not round intermediate calculations. Round your answer to the nearest dollar.$ What are your forecasts of the company's year-end inventory turnover ratio? Do not round intermediate calculations. Round your answer to two decimal places. x
Financial data for Joel de Paris, Inc., for last year follow: Joel de Paris, Inc. Balance Sheet Beginning Ending Balance Balance Assets 138,000 334,000 572,000 806,000 398,000 246,000 $ 2,494,000 Cash 131,000 482,000 489,000 788,000 435,000 254, 000 $ 2,579,000 Accounts receivable Inventory Plant and equipment, net Investment in Buisson, S.A. Land (undeveloped) Total assets Liabilities and Stockholders' Equity Accounts payable Long-term debt Stockholders' equity 389,000 1,025,000 1,080,000 $ 2,494,000 341,000 1,025,000 1,213,000 $ 2,579,000 Total liabilities and stockholders' equity Joel de Paris, Inc. Income Statement $ 5,049,000 4,241,160 807,840 Sales Operating expenses Net operating income Interest and taxes: $ 125,000 202,000 Interest expense Тах expense 327,000 Net income 480,840
A company reports the following for the prior year: $1.6 million in sales $1 million in total assets $160,000 in net income $800,000 in equity (at the beginning of this prior year) $ 520,000 in current assets $480,000 in fixed assets $48,000 in accounts payable $32,000 in accrued liabilities The company projects that the sales will grow at 30%. Calculate the AFN for this company assuming 80% retention ratio.
Consider the following scenario: Blue Hamster Manufacturing Inc.'s income statement reports data for its first year of operation. The firm's CEO would like sales to increase by 25% next year. 1. Blue Hamster is able to achieve this level of increased sales, but its interest costs increase from 10% to 15% of earnings before interest and taxes (EBIT). 2. The company's operating costs (excluding depreciation and amortization) remain at 65% of net sales, and its depreciation and amortization expenses remain constant from year to year. 3. The company's tax rate remains constant at 25% of its pre-tax income or earnings before taxes (EBT). 4. In Year 2, Blue Hamster expects to pay $200,000 and $2,280,656 of preferred and common stock dividends, respectively. Complete the Year 2 income statement data for Blue Hamster, then answer the questions that follow. Be sure to round each dollar value to the nearest whole dollar. Blue Hamster Manufacturing Inc. Income Statement for Year Ending December…
A company reports the following for the prior year: $1.6 million in sales $1 million in total assets $160, 000 in net income $800, 000 in equity (at the beginning of this prior year) $520, 000 in current assets $480, 000 in fixed assets $48, 000 ir accounts payable $32,000 in accrued liabilities The company projects that the sales will grow at 30 % . Calculate the AFN or this company assuming 80% retention ratio. a. $134,425 b. $127,650 c. $109,600 d. $76,950
Projected Operating Assets Berman & Jaccor Corporation's current sales and partial balance sheet are shown below. This year Sales $ 1,000 Balance Sheet: Assets Cash $ 100 Short-term investments $ 95 Accounts receivable $ 300 Inventories $ 200 Total current assets $ 695 Net fixed assets $ 550 Total assets $ 1,245 Sales are expected to grow by 12% next year. Assuming no change in operations from this year to next year, what are the projected total operating assets? Do not round intermediate calculations. Round your answer to the nearest dollar.
Last year, Harrington Inc. had sales of $325,000 and a net income of $19,000. Its year-end assets were $250,000. The firms total debt/total assets was 55%. What was the ROE?
Berman & Jaccor Corporation's current sales and partial balance sheet are shown below. This year Sales $ 1,000 Balance Sheet: Assets Cash $ 200 Short-term investments $ 140 Accounts receivable $ 100 Inventories $ 100 Total current assets $ 540 Net fixed assets $ 600 Total assets $ 1,140 Sales are expected to grow by 14% next year. Assuming no change in operations from this year to next year, what are the projected total operating assets? Do not round intermediate calculations. Round your answer to the nearest dollar.
Linear Technology had sales (all on credit) of $36 million and a gross profit margin of 30% last year. If Linear Technology's inventory averaged $3.9 million, and its accounts receivable were $5.0 million, what was the length of its operating cycle?
You have looked at the current financial statements for J&R Homes, Company. The company has an EBIT of $2,890,000 this year. Depreciation, the increase in net working capital, and capital spending were $227,000, $92,000, and $425,000, respectively. You expect that over the next five years, EBIT will grow at 18 percent per year, depreciation and capital spending will grow at 23 percent per year, and NWC will grow at 13 percent per year. The company currently has $15.5 million in debt and 415,000 shares outstanding. After Year 5, the adjusted cash flow from assets is expected to grow at 3.5 percent indefinitely. The company's WACC is 8.9 percent and the tax rate is 23 percent. What is the price per share of the company's stock? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Share price
Cold Goose Metal Works Inc.’s income statement reports data for its first year of operation. The firm’s CEO would like sales to increase by 25% next year. 1. Cold Goose is able to achieve this level of increased sales, but its interest costs increase from 10% to 15% of earnings before interest and taxes (EBIT). 2. The company’s operating costs (excluding depreciation and amortization) remain at 70% of net sales, and its depreciation and amortization expenses remain constant from year to year. 3. The company’s tax rate remains constant at 25% of its pre-tax income or earnings before taxes (EBT). 4. In Year 2, Cold Goose expects to pay $200,000 and $1,922,063 of preferred and common stock dividends, respectively. Complete the Year 2 income statement data for Cold Goose, then answer the questions that follow. Be sure to round each dollar value to the nearest whole dollar. Cold Goose Metal Works Inc. Income Statement for Year Ending December 31…

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