Suppose that Gyp Sum Industries currently has the balance sheet shown below, and thatsales for the year just ended were $10.6 million. The firm also has a profit margin of 25percent, a retention ratio of 30 percent, and expects sales of $8.6 million next year.AssetsCurrent$2,396,000 Current liabilitiesassetsFixed assets 4,600,000Liabilities and EquityTotal assets $6,996,000Long-term debtEquityTotal liabilities andequity$ 2,168,7601,800,0003,027,240$6,996,000If all assets and current liabilities are expected to shrink with sales, what amount ofadditional funds will Gyp Sum need from external sources to fund the expected growth?(Enter your answer in dollars not in millions. Negative amount should be indicated bya minus sign.)Additional funds needed

A balance sheet is a financial statement that reports a company's assets, liabilities, and…

Suppose that Gyp Sum Industries currently has the balance sheet shown below, and that sales for the year just ended were $10.6 million. The firm also has a profit margin of 25 percent, a retention ratio of 30 percent, and expects sales of $8.6 million next year. Assets Current $2,396,000 Current liabilities Long-term debt Equity assets Fixed assets 4,600,000 Liabilities and Equity Total assets $6,996,000 Total liabilities and equity $ 2,168,760 1,800,000 3,027,240 $6,996,000 If all assets and current liabilities are expected to shrink with sales, what amount of additional funds will Gyp Sum need from external sources to fund the expected growth? (Enter your answer in dollars not in millions. Negative amount should be indicated by a minus sign.) Additional funds needed

Suppose that Gyp Sum Industries currently has the balance sheet shown below, and that sales for the year just ended were $10.6 million. The firm also has a profit margin of 25 percent, a retention ratio of 30 percent, and expects sales of $8.6 million next year. Assets Current $2,396,000 Current liabilities Long-term debt Equity assets Fixed assets 4,600,000 Liabilities and Equity Total assets $6,996,000 Total liabilities and equity $ 2,168,760 1,800,000 3,027,240 $6,996,000 If all assets and current liabilities are expected to shrink with sales, what amount of additional funds will Gyp Sum need from external sources to fund the expected growth? (Enter your answer in dollars not in millions. Negative amount should be indicated by a minus sign.) Additional funds needed

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

A company has a required return of 12%, a profit margin of 4%, a D/E ratio of 0.5 and total asset turnover of 2. Annual dividends last year were $2.00. A) The company has a dividend payout ratio of 20%; calculate the price and forward P/E ratio. B) If the company would have changed its dividend payout ratio to 60%, what would happen to the price and forward P/E ratio? C) What variables are critical to determine if they should increase or decrease their dividend payout ratio? (Hint be specific what variables do you need to know.)
You are valuing Soda City Inc. It has $118 million of debt, $83 million of cash, and 168 million shares outstanding. You estimate its cost of capital is 11.2%. You forecast that it will generate revenues of $714 million and $786 million over the next two years, after which it will grow at a stable rate in perpetuity. Projected operating profit margin is 27%, tax rate is 26%, reinvestment rate is 34%, and terminal EV/FCFF exit multiple at the end of year 2 is 13. What is your estimate of its share value? Round to one decimal place. Solve Using equation
Am. 113.
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 in accounts payable $32,000 in accrued liabilities The company projects that the sales will grow at 30%. Calculate the AFN for this company assuming 80% retention ratio.
RPJ Co. has net Income of $2,937, a profit margin of 6.3 percent, a retention ratio of 45 percent, total assets of $52,800, and total debt of $24,300. Assets, current liabilities, and costs are proportional to sales. The company maintains a constant dividend payout ratio and debt-equity ratio and is operating at full capacity. What is the maximum dollar Increase in sales that can be sustained next year assuming no new equity is issued? Multiple Choice O O O O O $2,151 $1,211 $2,804 $2,267 $1,667
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.
use the following information to develop a spreadsheet model that will calculate the free cash flows and the value of the equity for the company. cost of capital 12% most recent year's sales $1000 nonoperating assets $100 interest-bearing debt $250 operating profit margin 12% working capital/sales 35% fixed assets/sales 20% noninterest-bearing current liabilities/sales 10% rax rate 40% forecasted sales growth years 1-2 12% years 3-5 8% years 6-∞ 4% calculate the value of the firm and the value of the equity in the firm using DCF analysis.
A) Obtain the EFN if the firm plans to have sales growth equal to 20% B) Use your fianncial model to estimate the internal growth rate
Need Help with this Question
Assume that a firm has sales of $11,700,000, total assets of $4,500,000 total common equity of $2,000,000 and an ROE of 37.4985 percent. Using DuPont equation, determine the profit margin for this firm.
Tomey Supply Company’s financial statements for the most recent fiscal year are shown below. The company projects that sales will increase by 27 percent next year. Assume that all costs and assets increase directly with sales. The company has a constant 39 percent dividend payout ratio and has no plans to issue new equity. Any financing needed will be raised through the sale of long-term debt. Prepare pro forma financial statements for the coming year based on this information, and calculate the EFN for Tomey. Tomey Supply Company Income Statement and Balance Sheet. Income Statement Balance Sheet Revenues $1,768,121 Assets Costs 1,116,487 Current Assets $280,754 EBT 651,634 Net Fixed Assets 713,655 Taxes (35%) 228,072 Total assets $994,409 Net Income $423,562 Liabilities and Equity: Current Liabilities $167,326 Long-term…