How do I construct a pro forma balance sheet for the next year and how do I calculate external funds needed? Dahlia Colby, CFO of Charming Florist Ltd., has created the firm's pro forma balancesheet for the next fiscal year. Sales are projected to grow by 20 percent to $330 million.Current assets, fixed assets, and short-term debt are 15 percent, 75 percent, and 5percent of sales, respectively. Charming Florist pays out 25 percent of its net income individends. The company currently has $126 million of long-term debt and $54 million incommon stock par value. The profit margin is 16 percent.

The next year's sales are $330 million which has grown by 20 percent. So, the current year's sales…

Answered: Dahlia Colby, CFO of Charming Florist…

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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How do I construct a pro forma balance sheet for the next year and how do I calculate external funds needed?

Dahlia Colby, CFO of Charming Florist Ltd., has created the firm's pro forma balance
sheet for the next fiscal year. Sales are projected to grow by 20 percent to $330 million.
Current assets, fixed assets, and short-term debt are 15 percent, 75 percent, and 5
percent of sales, respectively. Charming Florist pays out 25 percent of its net income in
dividends. The company currently has $126 million of long-term debt and $54 million in
common stock par value. The profit margin is 16 percent.

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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