Problem 1. Odette Electronics has 90 operating plants in seven southwestern states. Sales for last year were P100 million, and the statement of financial position 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. Statement of Financial Position (in P millions) Assets Liabilities andEquity Cash.... P2 Accountspayable. .P15 Accountsreceivable. . 20 Accruedwages.. . .2 Inventory.... 23 Accruedtaxes... Currentassets.... P45 Currentliabilities.... P25 Fixedassets.... 40 Notespayable. 10 Ordinaryshares... 15 Retainedearnings... 35 Totalassets.... P85 Total liabilitiesandequity... .P85 Odette's has an after-tax profit margin of 7 percent and a dividend payout ratio of 40 percent. If sales grow by 10 percent next year, determine how much of new funds are needed to finance the growth.

Problem 1. Odette Electronics has 90 operating plants in seven southwestern states. Sales for last year were P100 million, and the statement of financial position 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. Statement of Financial Position (in P millions) Assets Liabilities andEquity Cash.... P2 Accountspayable. .P15 Accountsreceivable. . 20 Accruedwages.. . .2 Inventory.... 23 Accruedtaxes... Currentassets.... P45 Currentliabilities.... P25 Fixedassets.... 40 Notespayable. 10 Ordinaryshares... 15 Retainedearnings... 35 Totalassets.... P85 Total liabilitiesandequity... .P85 Odette's has an after-tax profit margin of 7 percent and a dividend payout ratio of 40 percent. If sales grow by 10 percent next year, determine how much of new funds are needed to finance the growth.

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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