Daryyu Inc.’s Balance Sheet as of December 31, 2022 is as follows: Current Assets P 800,000.00 Accounts Payable P 200,000.00 Notes Payable 200,000.00 Long-term Liabilities 350,000.00 Fixed Assets 300,000.00 Equity 350,000.00 1,100,000.00 1,100,000.00 In 2022, the company reported sales of 3,000,000, Net Income of 60,000, and dividends of 10,000. Sales are projected to increase by 10% next year. Both Profit Margin and the Dividend Pay-Out Ratio will remain the same. Operations are at full capacity. Assume external fund will be raised through issuances of Long-Term Obligations or Bonds. A. How much Long-term Debt will the company have to issue next year? B. If the operations are not in full capacity, what will be your answer?
Daryyu Inc.’s
|
Current Assets |
P |
800,000.00 |
Accounts Payable |
P |
200,000.00 |
|
|
Notes Payable |
200,000.00 |
|||||
|
Long-term Liabilities |
350,000.00 |
|||||
|
Fixed Assets |
300,000.00 |
Equity |
350,000.00 |
|||
|
1,100,000.00 |
1,100,000.00 |
In 2022, the company reported sales of 3,000,000, Net Income of 60,000, and dividends of 10,000. Sales are projected to increase by 10% next year. Both Profit Margin and the Dividend Pay-Out Ratio will remain the same. Operations are at full capacity. Assume external fund will be raised through issuances of Long-Term Obligations or Bonds.
A. How much Long-term Debt will the company have to issue next year?
B. If the operations are not in full capacity, what will be your answer?
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