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Construct Pro-forma balance sheet and income statement for 2022 What is the external financing needed to finance 50% sales growth What is company's sustainable growth rate

Construct Pro-forma balance sheet and income statement for 2022 What is the external financing needed to finance 50% sales growth What is company's sustainable growth rate

FINANCIAL ACCOUNTING
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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Consider 2021 consolidated balance sheet and income statement for Pfizer Corporation (PFE). The company projects that its revenue for 2022 will grow at the annual rate of 50%. > All assets are assumed to grow at the same rate as sales. > All current liabilities are assumed to grow at the same rate as sales. All operating expenses are assumed to grow at the same annual growth rate as sales. All non-operating income/expenses as well as depreciation and amortization are assumed to remain at the same level as they were in 2021. For the time being, the company wants to keep its long-term debt at 2021 level. Company plans to keep the same dividend payout ratio as it did in 2021. Balance Sheet as of December 31, 2021 Assets Liabilities and Owner's Equity Current Assets Current Liabilities Cash & Short Term 31,069 Current Portion of Long Term Debt 1,636 Investments 11,479 Accounts Payable 9,059 | Income Tax Payable 8,086 Other Current Liabilities Dividends Payable Accrued Payroll Notes Payable Accounts Receivable Inventories 5,578 1,266 30,057 2,249 Other Current Assets Total Current Assets 59,693 3,332 24,476 $38,537 Net Property, Plant & Equipment Investments and Total Current Liabilities 17,721 21,526 Long-Term Debt 38,705 Advances Intangible Assets Other Assets Total Assets 74,354 Total Liabilities 77,242 4,840 178,134 Owners’ Equity Common stock and paid -in surplus 100,892 Total liabilities and owner's 178,134 equity
Transcribed Image Text:Consider 2021 consolidated balance sheet and income statement for Pfizer Corporation (PFE). The company projects that its revenue for 2022 will grow at the annual rate of 50%. > All assets are assumed to grow at the same rate as sales. > All current liabilities are assumed to grow at the same rate as sales. All operating expenses are assumed to grow at the same annual growth rate as sales. All non-operating income/expenses as well as depreciation and amortization are assumed to remain at the same level as they were in 2021. For the time being, the company wants to keep its long-term debt at 2021 level. Company plans to keep the same dividend payout ratio as it did in 2021. Balance Sheet as of December 31, 2021 Assets Liabilities and Owner's Equity Current Assets Current Liabilities Cash & Short Term 31,069 Current Portion of Long Term Debt 1,636 Investments 11,479 Accounts Payable 9,059 | Income Tax Payable 8,086 Other Current Liabilities Dividends Payable Accrued Payroll Notes Payable Accounts Receivable Inventories 5,578 1,266 30,057 2,249 Other Current Assets Total Current Assets 59,693 3,332 24,476 $38,537 Net Property, Plant & Equipment Investments and Total Current Liabilities 17,721 21,526 Long-Term Debt 38,705 Advances Intangible Assets Other Assets Total Assets 74,354 Total Liabilities 77,242 4,840 178,134 Owners’ Equity Common stock and paid -in surplus 100,892 Total liabilities and owner's 178,134 equity
2021 Income Statement Sales/Revenue 81,288 29,222 COGS excluding D&A Depreciation & Amortization Expense SG&A Expense ЕBIT 5,191 26,082 20,793 Non-Operating Income/Expense Interest Expense Тах Net Income 4,126 1,291 1,852 $21,776 1. Construct Pro-forma balance sheet and income statement for 2022 2. What is the external financing needed to finance 50% sales growth 3. What is company’s sustainable growth rate
Transcribed Image Text:2021 Income Statement Sales/Revenue 81,288 29,222 COGS excluding D&A Depreciation & Amortization Expense SG&A Expense ЕBIT 5,191 26,082 20,793 Non-Operating Income/Expense Interest Expense Тах Net Income 4,126 1,291 1,852 $21,776 1. Construct Pro-forma balance sheet and income statement for 2022 2. What is the external financing needed to finance 50% sales growth 3. What is company’s sustainable growth rate
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