Problem 3-9 External Funds Needed Dahlia Colby, CFO of Charming Florist Limited, has created the firm’s pro forma balance sheet for the next fiscal year. Sales are projected to grow by 10 percent to $330 million. Current assets, fixed assets, and short-term debt are 25 percent, 80 percent, and 15 percent of sales, respectively. Charming Florist pays out 30 percent of its net income in dividends. The company currently has $135 million of long-term debt and $63 million in common stock par value. The profit margin is 10 percent. a. Construct the current balance sheet for the firm using the projected sales figure. (Do not round intermediate calculations and enter your answers in dollars, not millions of dollars, rounded to the nearest whole number, e.g., 1,234,567.) b. Based on Ms. Colby’s sales growth forecast, how much does Charming Florist need in external funds for the upcoming fiscal year? (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to the nearest whole number, e.g., 1,234,567.) c-1. Construct the firm’s pro forma balance sheet for the next fiscal year. (Do not round intermediate calculations and enter your answers in dollars, not millions of dollars, rounded to the nearest whole numbert, e.g., 1,234,567.) c-2. Calculate the external funds needed. (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to the nearest whole number, e.g., 1,234,567.)

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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Problem 3-9 External Funds Needed

Dahlia Colby, CFO of Charming Florist Limited, has created the firm’s pro forma balance sheet for the next fiscal year. Sales are projected to grow by 10 percent to $330 million. Current assets, fixed assets, and short-term debt are 25 percent, 80 percent, and 15 percent of sales, respectively. Charming Florist pays out 30 percent of its net income in dividends. The company currently has $135 million of long-term debt and $63 million in common stock par value. The profit margin is 10 percent.

a.	Construct the current balance sheet for the firm using the projected sales figure. (Do not round intermediate calculations and enter your answers in dollars, not millions of dollars, rounded to the nearest whole number, e.g., 1,234,567.)

b.	Based on Ms. Colby’s sales growth forecast, how much does Charming Florist need in external funds for the upcoming fiscal year? (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to the nearest whole number, e.g., 1,234,567.)

c-1.

Construct the firm’s pro forma balance sheet for the next fiscal year. (Do not round intermediate calculations and enter your answers in dollars, not millions of dollars, rounded to the nearest whole numbert, e.g., 1,234,567.)

c-2.

Calculate the external funds needed. (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to the nearest whole number, e.g., 1,234,567.)

Problem 3-9 External Funds Needed
Dahlia Colby, CFO of Charming Florist Limited, has created the firm's pro forma balance
sheet for the next fiscal year. Sales are projected to grow by 10 percent to $330 million.
Current assets, fixed assets, and short-term debt are 25 percent, 80 percent, and 15
percent of sales, respectively. Charming Florist pays out 30 percent of its net income in
dividends. The company currently has $135 million of long-term debt and $63 million in
common stock par value. The profit margin is 10 percent.
a. Construct the current balance sheet for the firm using the projected sales figure. (Do
not round intermediate calculations and enter your answers in dollars, not millions
of dollars, rounded to the nearest whole number, e.g., 1,234,567.)
Total assets
Assets
Balance Sheet
Liabilities and equity
Total equity
Total liabilities and equity

b. Based on Ms. Colby's sales growth forecast, how much does Charming Florist need in
external funds for the upcoming fiscal year? (Do not round intermediate calculations
and enter your answer in dollars, not millions of dollars, rounded to the nearest
whole number, e.g., 1,234,567.)
External financing needed
c-1. Construct the firm's pro forma balance sheet for the next fiscal year. (Do not round
intermediate calculations and enter your answers in dollars, not millions of
dollars, rounded to the nearest whole numbert, e.g., 1,234,567.)
Total assets
Assets
Balance Sheet
Total equity
Total liabilities and equity
Liabilities and equity
c-2. Calculate the external funds needed. (Do not round intermediate calculations and
enter your answer in dollars, not millions of dollars, rounded to the nearest whole

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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