Owen's Electronics has nine operating plants in seven southwestern states. Sales for last year were $100 million, and the balancesheet at year-end is similar in percentage of sales to that of previous years (and this will continue in the future). All assets (includingfixed assets) and current liabilities will vary directly with sales. The firm is working at full capacity.AssetsCashAccounts receivableInventoryCurrent assetsFixed assetsTotal assetsBalance Sheet(in $ millions)Liabilities and Stockholders' Equity$ 2 Accounts payable2224$ 4843Accrued wagesAccrued taxesCurrent liabilitiesNotes payableCommon stockRetained earnings$91 Total liabilities and stockholders' equity$ 16410$30Answer is complete but not entirely correct.New funds$ 8,075,000 >121732$ 91Owen's Electronics has an aftertax profit margin of 6 percent and a dividend payout ratio of 45 percent.If sales grow by 20 percent next year, determine how many dollars of new funds are needed to finance the growth. (Do not roundintermediate calculations. Enter your answer in dollars, not millions, (e.g., $1,234,567).)

STEP 1 By taking into account the expenses associated with creating and selling products, profit…

Owen's Electronics has nine operating plants in seven southwestern states. Sales for last year were $100 million, and the balance sheet at year-end is similar in percentage of sales to that of previous years (and this will continue in the future). All assets (including fixed assets) and current liabilities will vary directly with sales. The firm is working at full capacity. Assets Cash Accounts receivable Inventory Current assets Fixed assets Total assets $ 2 22 24 $48 Balance Sheet (in $ millions) Liabilities and Stockholders' Equity Accounts payable Accrued wages Accrued taxes Current liabilities Notes payable Common stock Retained earnings $91 Total liabilities and stockholders' equity $ 16 4 10 $30 12 17 32 $91 Owen's Electronics has an aftertax profit margin of 6 percent and a dividend payout ratio of 45 percent. If sales grow by 20 percent next year, determine how many dollars of new funds are needed to finance the growth. (Do not round intermediate calculations. Enter your answer in dollars, not millions, (e.g., $1,234,567).)

Owen's Electronics has nine operating plants in seven southwestern states. Sales for last year were $100 million, and the balance sheet at year-end is similar in percentage of sales to that of previous years (and this will continue in the future). All assets (including fixed assets) and current liabilities will vary directly with sales. The firm is working at full capacity. Assets Cash Accounts receivable Inventory Current assets Fixed assets Total assets $ 2 22 24 $48 Balance Sheet (in $ millions) Liabilities and Stockholders' Equity Accounts payable Accrued wages Accrued taxes Current liabilities Notes payable Common stock Retained earnings $91 Total liabilities and stockholders' equity $ 16 4 10 $30 12 17 32 $91 Owen's Electronics has an aftertax profit margin of 6 percent and a dividend payout ratio of 45 percent. If sales grow by 20 percent next year, determine how many dollars of new funds are needed to finance the growth. (Do not round intermediate calculations. Enter your answer in dollars, not millions, (e.g., $1,234,567).)

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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A company reports the following for the past year. Sales $ 11,680,000 Income 5,256,000 Average assets 29,200,000 The company's CFO believes that income for next year will be $6,832,800. Average assets will be the same as the past year. 1. Compute return on investment for the past year. 2. If the CFO's forecast is correct, what will return on investment be for next year?
Appalachian Registers, Inc. (ARI) has current sales of $50 million. Sales are expected to grow to $75 million next year. ARI currently has accounts receivable of $11 million, inventories of $15 million, and net fixed assets of $17 million. These assets are expected to grow at the same rate as sales over the next year. Accounts payable are expected to increase from their current level of $15 million to a new level of $20 million next year. ARI wants to increase its cash balance at the end of next year by $3 million over its current cash balances, which average $4 million. Earnings after taxes next year are forecasted to be $10 million. Next year, ARI plans to pay dividends of $1 million, up from $500,000 this year. ARI’s marginal tax rate is 34 percent. How much external financing is required by ARI next year? Enter your answer in millions. For example, an answer of $1.2 million should be entered as 1.2, not 1,200,000. Round your answer to two decimal places. $ _____ million ?
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.
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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
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.
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Libscomb Technologies' annual sales are $6,974,991 and all sales are made on credit, it purchases $3,511,535 of materials each year (and this is its cost of goods sold). Libscomb also has $550,869 of inventory, $522,928 of accounts receivable, and $477,584 of accounts payable. Assume a 365 day year. What is Libscomb’s Inventory Turnover?
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?
Williamson Industries has $4 billion in sales and $1.774 billion in fixed assets. Currently, the company's fixed assets are operating at 95% of capacity. a. What level of sales could Williamson Industries have obtained if it had been operating at full capacity? Enter your answer in billions of dollars. Round your answer to five decimal places. $ billion b. What is Williamson's target fixed assets/sales ratio? Do not round intermediate calculations. Round your answer to two decimal places. % c. If Williamson's sales increase 15%, how large of an increase in fixed assets will the company need to meet its target fixed assets/sales ratio? Enter your answer in billions of dollars. Negative value should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to five decimal places. $ billion
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…
Berman & Jaccor Corporation's current sales and partial balance sheet are shown below. This year Sales $ 1,000 Balance Sheet: Assets Cash $ 150 Short-term investments $ 110 Accounts receivable $ 200 Inventories $ 250 Total current assets $ 710 Net fixed assets $ 500 Total assets $ 1,210 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. $

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