S Ltd. Has equity of Rs.6Lacs issued at par. The following additional informationis provided:re.eFixed assets to current assets ratio is 1:2.Dividend payout is twice the growth rate in sales.Profit margin is 40% of growth rate in sales.You are required to construct the balance sheet and project the externalfunds requirement..Sales to net worth ratio is 5Growth rate in sales for the next year is 25%Long-terms loans are 1.5 times the retained earnings.Outstanding creditors are half long-term loans.Short-term bank borrowings are equals to outstanding creditors.Current assets are Rs.12Lacs.

Please find attachment below In step 2 balence sheet with working notes

S Ltd. Has equity of Rs.6Lacs issued at par. The following additional information is provided: r . . Sales to net worth ratio is 5 is Growth rate in sales for the next year is 25% Long-terms loans are 1.5 times the retained earnings. Outstanding creditors are half long-term loans. Short-term bank borrowings are equals to outstanding creditors. Current assets are Rs.12Lacs

S Ltd. Has equity of Rs.6Lacs issued at par. The following additional information is provided: r . . Sales to net worth ratio is 5 is Growth rate in sales for the next year is 25% Long-terms loans are 1.5 times the retained earnings. Outstanding creditors are half long-term loans. Short-term bank borrowings are equals to outstanding creditors. Current assets are Rs.12Lacs

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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In the past year, TVG had revenues of $2.93 million, cost of goods sold of $2.43 million, and depreciation expense of $102,200. The firm has a single issue of debt outstanding with book value of $1.17 million on which it pays an interest rate of 10%. What is the firm’s times interest earned ratio? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Purple Panda Products Inc. has a total asset turnover ratio of 8.50x, net annual sales of $40 million, and operating expenses of $18 million (including depreciation and amortization). On its balance sheet and income statement, respectively, it reported total debt of $1.75 million on which it pays a 7% interest rate. To analyze a company's financial leverage situation, you need to measure the firm's debt management ratios. Based on the preceding information, what are the values for Purple Panda's debt management ratios? Ratio Debt ratio Times-interest-earned ratio Value Influenced by a firm's ability to make interest payments and pay back its debt, if all else is equal, creditors would prefer to give loans to companies with debt ratios.
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