SALES INCREASE Pierce Furnishings generated $2 million in sales during 2015, and its year-end total assets were $1.5 million. Also, at year-end 2015, current liabilities were $500,000, consisting of $200,000 of notes payable, $200,000 of accounts payable, and $100,000 of accrued liabilities. Looking ahead to 2016, the company estimates that its assets must increase by $0.75 for every $1.00 increase in sales. Pierce's profit margin is 5%, and its reten- tion ratio is 40%. How large of a sales increase can the company achieve without having to raise funds externally?

SALES INCREASE Pierce Furnishings generated $2 million in sales during 2015, and its year-end total assets were $1.5 million. Also, at year-end 2015, current liabilities were $500,000, consisting of $200,000 of notes payable, $200,000 of accounts payable, and $100,000 of accrued liabilities. Looking ahead to 2016, the company estimates that its assets must increase by $0.75 for every $1.00 increase in sales. Pierce's profit margin is 5%, and its reten- tion ratio is 40%. How large of a sales increase can the company achieve without having to raise funds externally?

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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A company reports the following for the prior year: $1.6 million in sales $1 million in total assets $160, 000 in net income $800, 000 in equity (at the beginning of this prior year) $520, 000 in current assets $480, 000 in fixed assets $48, 000 ir accounts payable $32,000 in accrued liabilities The company projects that the sales will grow at 30 % . Calculate the AFN or this company assuming 80% retention ratio. a. $134,425 b. $127,650 c. $109,600 d. $76,950
Projected Operating Assets Berman & Jaccor Corporation's current sales and partial balance sheet are shown below. This year Sales $ 1,000 Balance Sheet: Assets Cash $ 100 Short-term investments $ 95 Accounts receivable $ 300 Inventories $ 200 Total current assets $ 695 Net fixed assets $ 550 Total assets $ 1,245 Sales are expected to grow by 12% next year. Assuming no change in operations from this year to next year, what are the projected total operating assets? Do not round intermediate calculations. Round your answer to the nearest dollar.
W. F. Bailey Company had a quick ratio of 1.4, a current ratio of 3.0, an inven-tory turnover of five times, total current assets of $810,000, and cash andequivalents of $120,000 in 2015. If the cost of goods sold equaled 80 percent ofsales, what were Bailey’s annual sales and DSO?
2sammy Eaolt corPoration rePorted net sales of $300 2015,2016 and 2017 respectively. IF el5 is the base Year, what is the trend e t Percentade for 20l7? 0000,330.000, and $ 360000 in the years, a) 77 6 (b)108% (C) 120% (d) 130%
None
Projected Operating Assets Berman & Jaccor Corporation's current sales and partial balance sheet are shown below. This year Sales $ 1,000 Balance Sheet: Assets Cash $ 150 Short-term investments $ 125 Accounts receivable $ 250 Inventories $ 100 Total current assets $ 625 Net fixed assets $ 600 Total assets $ 1,225 Sales are expected to grow by 14% next year. Assuming no change in operations from this year to next year, what are the projected total operating assets? Do not round intermediate calculations. Round your answer to the nearest dollar
LONG-TERM FINANCING NEEDED At year-end 2016, total assets for Arrington Inc. were $2 million and accounts payable were $320,000. Sales, which in 2016 were $2 million, are expected to increase by 20% in 2017. Total assets and accounts payable are proportional to sales, and that relationship will be maintained; that is, they will grow at the same rate as sales. Arrington typically uses r current liabilities other than accounts payable. Common stock amounted to $350,000 in 2016, and retained earnings were $280,000. Arrington plans to sell new common stock in the amount of $175,000. The firm's profit margin on sales is 6%; 40% of earnings will be retained. a. What were Arrington's total liabilities in 2016? Write out your answer completely. For example, 25 million should be entered as 25,000,000. Round your answer to the nearest cent. b. How much new long-term debt financing will be needed in 2017? Write out your answer completely. For example, 25 million should be entered as 25,000,000.…
The Booth Company's sales are forecasted to double from $1,000 in 2016 to $2,000 in 2017. Here is the December 31, 2016, balance sheet: Cash Accounts payable Accounts receivable Notes payable Inventories Accruals Net fixed assets Long-term debt Common stock Retained earnings Total liabilities and equity $50 150 50 400 100 250 Total assets $1000 $1000 Booth's fixed assets were used to only 50% of capacity during 2016, but its current assets were at their proper levels in relation to sales. All assets except fixed assets must increase at the same rate as sales, and fixed assets would also have to increase at the same rate if the current excess capacity did not exist. Booth's after-tax profit margin is forecasted to be 5% and its payout ratio to be 50%. What is Booth's additional funds needed (AFN) for the coming year? Round your answer to the nearest dollar. $ $ 100 200 200 500 360
Q1 Libscomb Technologies' annual sales are $5,153,262 and all sales are made on credit, it purchases $3,894,023 of materials each year (and this is its cost of goods sold). Libscomb also has $500,636 of inventory, $477,741 of accounts receivable, and $490,466 of accounts payable. Assume a 365 day year. What is Libscomb’s Inventory Turnover?
Please explain without excel
Bottling's December 31st balance sheet is given below: Cash 10 Accounts payable $ 15Accounts receivable 25 Notes payable 20 Inventory 40 Accrued wages and taxes 15 Net fixed assets 75 Long-term debt 30 Common equity 70 Total liabilities Total assets $150 and equity $150 Sales during the past year were $100, and they are expected to rise by 50 percent to $150 during next year. Also, during last year fixed assets were being utilized to only 85 percent of capacity (excess capacity). Assume that profit margin will remain constant at 5 percent and that the company will continue to pay out 60 percent of its earnings as dividends. To the nearest whole dollar, what amount of nonspontaneous, additional funds will be…
Sales Increase Maggie's Muffins Bakery generated $2 million in sales during 2018, and its year-end total assets were $1.3 million. Also, at year-end 2018, current liabilities were $1 million, consisting of $300,000 of notes payable, $500,000 of accounts payable, and $200,000 of accruals. Looking ahead to 2019, the company estimates that its assets must increase at the same rate as sales, its spontaneous liabilities will increase at the same rate as sales, its profit margin will be 6%, and its payout ratio will be 50%. How large a sales increase cam the company achieve without having to raise funds externally-that is, what is its self-supporting growth rate? Do not round intermediate calculations. Round the monetary value to the nearest dollar and percentage value to the nearest whole number. Sales can increase by $ that is by

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