Balance SheetLiabilities & EquityShort Term DebtLong Term DebtTotal LiabilitiesAmount (Tk.)5,200| 6,000| 11,200Amount (Tk)7,200AssetsCurrent AssetsFixed Assets17,200Common Stock3,200Accumulated Retained 10,000EarningsTotal Equity13,200|24,400Total Assets24,400Total Liabilities &EquityCurrent assets, fixed assets and short term debt are linked with sales revenue. Tax rate and dividendpayout will remain the same.a. Construct the firm's pro forma income statement and balance sheet for next year and confirm theexternal funds needed that you calculated in part (a).b. Calculate the sustainable growth rate for the company.c. Why the company may not be able to maintain the targeted sustainable growth rate? Explain. Question: The ABC Company has forecast a sales growth rate of . Percent (see appendix) for next year.The current financial statements are shown here:Income Statementsales growth rate 14.5%Amount (Tk.)26,00021,0005,0001,3503,650SalesCostsTaxable Income-TaxesNet Income1,0952,555DividendsAddition to Retained Earnings

Hello, Here I present the proforma income statement for the next year along with the next year-end…

Answered: Lom 17,200 Con Ac

Business

Accounting

Lom 17,200 Con Ac

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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Question

Balance Sheet
Liabilities & Equity
Short Term Debt
Long Term Debt
Total Liabilities
Amount (Tk.)
5,200
| 6,000
| 11,200
Amount (Tk)
7,200
Assets
Current Assets
Fixed Assets
17,200
Common Stock
3,200
Accumulated Retained 10,000
Earnings
Total Equity
13,200
|24,400
Total Assets
24,400
Total Liabilities &
Equity
Current assets, fixed assets and short term debt are linked with sales revenue. Tax rate and dividend
payout will remain the same.
a. Construct the firm's pro forma income statement and balance sheet for next year and confirm the
external funds needed that you calculated in part (a).
b. Calculate the sustainable growth rate for the company.
c. Why the company may not be able to maintain the targeted sustainable growth rate? Explain.

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