The most recent financial statements for Crosby, Inc., follow. Interest expense will remain constant; the tax rate and the dividend payout rate will also remain constant. Costs, other expenses, current assets, fixed assets, and accounts payable increase spontaneously with sales. CROSBY, INC.2017 Income Statement Sales $ 760,000 Costs 616,000 Other expenses 27,500 Earnings before interest and taxes $ 116,500 Interest paid 12,800 Taxable income $ 103,700 Taxes (22%) 22,814 Net income $ 80,886 Dividends $ 28,340 Addition to retained earnings 52,546 CROSBY, INC.Balance Sheet as of December 31, 2017 Assets Liabilities and Owners’ Equity Current assets Current liabilities Cash $ 24,940 Accounts payable $ 60,200 Accounts receivable 34,330 Notes payable 16,700 Inventory 71,150 Total $ 76,900 Total $ 130,420 Long-term debt $ 108,000 Owners’ equity Fixed assets Common stock and paid-in surplus $ 103,000 Net plant and equipment $ 217,000 Retained earnings 59,520 Total $ 162,520 Total assets $ 347,420 Total liabilities and owners’ equity $ 347,420 Complete the pro forma income statements below. (Input all answers as positive values. Do not round intermediate calculations.) Calculate the EFN for 20, 25 and 30 percent growth rates. (Do not round intermediate calculations. A negative answer should be indicated by a minus sign.)
The most recent financial statements for Crosby, Inc., follow. Interest expense will remain constant; the tax rate and the dividend payout rate will also remain constant. Costs, other expenses, current assets, fixed assets, and accounts payable increase spontaneously with sales. CROSBY, INC.2017 Income Statement Sales $ 760,000 Costs 616,000 Other expenses 27,500 Earnings before interest and taxes $ 116,500 Interest paid 12,800 Taxable income $ 103,700 Taxes (22%) 22,814 Net income $ 80,886 Dividends $ 28,340 Addition to retained earnings 52,546 CROSBY, INC.Balance Sheet as of December 31, 2017 Assets Liabilities and Owners’ Equity Current assets Current liabilities Cash $ 24,940 Accounts payable $ 60,200 Accounts receivable 34,330 Notes payable 16,700 Inventory 71,150 Total $ 76,900 Total $ 130,420 Long-term debt $ 108,000 Owners’ equity Fixed assets Common stock and paid-in surplus $ 103,000 Net plant and equipment $ 217,000 Retained earnings 59,520 Total $ 162,520 Total assets $ 347,420 Total liabilities and owners’ equity $ 347,420 Complete the pro forma income statements below. (Input all answers as positive values. Do not round intermediate calculations.) Calculate the EFN for 20, 25 and 30 percent growth rates. (Do not round intermediate calculations. A negative answer should be indicated by a minus sign.)
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
Related questions
Question
|
The most recent financial statements for Crosby, Inc., follow. Interest expense will remain constant; the tax rate and the |
| CROSBY, INC. 2017 Income Statement |
||||||
| Sales | $ | 760,000 | ||||
| Costs | 616,000 | |||||
| Other expenses | 27,500 | |||||
| Earnings before interest and taxes | $ | 116,500 | ||||
| Interest paid | 12,800 | |||||
| Taxable income | $ | 103,700 | ||||
| Taxes (22%) | 22,814 | |||||
| Net income | $ | 80,886 | ||||
| Dividends | $ | 28,340 | ||||
| Addition to |
52,546 | |||||
| CROSBY, INC. Balance Sheet as of December 31, 2017 |
|||||||
| Assets | Liabilities and Owners’ Equity | ||||||
| Current assets | Current liabilities | ||||||
| Cash | $ | 24,940 | Accounts payable | $ | 60,200 | ||
| Accounts receivable | 34,330 | Notes payable | 16,700 | ||||
| Inventory | 71,150 | Total | $ | 76,900 | |||
| Total | $ | 130,420 | Long-term debt | $ | 108,000 | ||
| Owners’ equity | |||||||
| Fixed assets | Common stock and paid-in surplus | $ | 103,000 | ||||
| Net plant and equipment | $ | 217,000 | Retained earnings | 59,520 | |||
| Total | $ | 162,520 | |||||
| Total assets | $ | 347,420 | Total liabilities and owners’ equity | $ | 347,420 | ||
|
Complete the pro forma income statements below. (Input all answers as positive values. Do not round intermediate calculations.) |
| Calculate the EFN for 20, 25 and 30 percent growth rates. (Do not round intermediate calculations. A negative answer should be indicated by a minus sign.) |
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