Problem 19.17 If projected sales growth is actually 8.80%, Calculate the EFN. (Refer to Exhibits 19.10 and 19.11.) (Round answer to 2 decimal places, e.g. 0.45. Enter negative amount using either a negative sign preceding the number e.g. -0.45 or parentheses e.g. (0.45).) Exhibit 19.10 Empire Enterprises: Pro Forma Income Statement and Balance Sheet (5 millions) Income Statement Net sales $ 120.0 108.0 $ 12.0 Costs Net income Dividends $ 7.2 Additions to retained earnings $ 4.8 Balance Sheet Assets Liabilities and Stockholders' Equity Change Change Assets $ 60.0 $ 10.0 Total debt $ 20.0 $0.0 Equity 34.8 4.8 $ 10.0 $ 54.8 $ 4.8 Total assets $ 60.0 Total liabilities and stockholder's equity External financing needed (EFN) $5.2 $ 5.2 The pro forma balance sheet for Empire Enterprises does not balance, and the difference is the amount of EFN. Because the company's board does not wish to issue common stock, the funding will have to take the form of long-term debt.

Problem 19.17 If projected sales growth is actually 8.80%, Calculate the EFN. (Refer to Exhibits 19.10 and 19.11.) (Round answer to 2 decimal places, e.g. 0.45. Enter negative amount using either a negative sign preceding the number e.g. -0.45 or parentheses e.g. (0.45).) Exhibit 19.10 Empire Enterprises: Pro Forma Income Statement and Balance Sheet (5 millions) Income Statement Net sales $ 120.0 108.0 $ 12.0 Costs Net income Dividends $ 7.2 Additions to retained earnings $ 4.8 Balance Sheet Assets Liabilities and Stockholders' Equity Change Change Assets $ 60.0 $ 10.0 Total debt $ 20.0 $0.0 Equity 34.8 4.8 $ 10.0 $ 54.8 $ 4.8 Total assets $ 60.0 Total liabilities and stockholder's equity External financing needed (EFN) $5.2 $ 5.2 The pro forma balance sheet for Empire Enterprises does not balance, and the difference is the amount of EFN. Because the company's board does not wish to issue common stock, the funding will have to take the form of long-term debt.

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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