Sales Costs Earnings before taxes Income taxes (40%) Net income Current assets Net fixed assets Total assets Current liabilities Long-term debt Common shares Statement of Comprehensive Income For the year ended December 31, 2023 $ 700,000 500,000 200,000 80,000 $ 120,000 Statement of Financial Position December 31, 2023 Retained earnings Total liabilities and equity $ EA $ 420,000 580,000 1,000,000 EA 200,000 250,000 150,000 400,000 $ 1,000,000 Costs, all assets, and current liabilities are proportional to sales, while long-term debt and common shares will remain the same. Sales are projected to increase by 20% in 2024, and retention ratio will be 70%. Calculate the amount of external financing needed (EFN) for 2024. Show your work.
Sales Costs Earnings before taxes Income taxes (40%) Net income Current assets Net fixed assets Total assets Current liabilities Long-term debt Common shares Statement of Comprehensive Income For the year ended December 31, 2023 $ 700,000 500,000 200,000 80,000 $ 120,000 Statement of Financial Position December 31, 2023 Retained earnings Total liabilities and equity $ EA $ 420,000 580,000 1,000,000 EA 200,000 250,000 150,000 400,000 $ 1,000,000 Costs, all assets, and current liabilities are proportional to sales, while long-term debt and common shares will remain the same. Sales are projected to increase by 20% in 2024, and retention ratio will be 70%. Calculate the amount of external financing needed (EFN) for 2024. Show your work.
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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Transcribed Image Text:Sales
Costs
Earnings before taxes
Income taxes (40%)
Net income
Current assets
Net fixed assets
Total assets
Current liabilities
Long-term debt
Common shares
Statement of Comprehensive Income
For the year ended December 31, 2023
$
700,000
500,000
200,000
80,000
$
120,000
Statement of Financial Position
December 31, 2023
Retained earnings
Total liabilities and equity
$
EA
$
420,000
580,000
1,000,000
EA
200,000
250,000
150,000
400,000
$
1,000,000
Costs, all assets, and current liabilities are proportional to sales, while long-term debt and
common shares will remain the same. Sales are projected to increase by 20% in 2024, and
retention ratio will be 70%. Calculate the amount of external financing needed (EFN) for 2024.
Show your work.
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