The most recent financial statements for Crosby, Incorporated, 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. Assume the firm is operating at full capacity and the debt- equity ratio is held constant. Sales Costs Other expenses Earnings before interest and taxes Interest paid Taxable income Taxes (22%) Net income Dividends Addition to retained earnings Inventory Total Current assets Cash Accounts receivable CROSBY, INCORPORATED 2020 Income Statement Total assets Sales Costs Fixed assets Net plant and equipment $227,000 Other expenses EBIT Interest paid Taxable income Taxes (22%) Net income $ 32,940 40,926 Dividends Add to RE $ 25,940 35,430 72,050 $ 133,420 CROSBY, INCORPORATED Balance Sheet as of December 31, 2020 Assets $360,420 $ 770,000 626,000 32,500 $ 111,500 16,800 $ 94,700 20,834 $ 73,866 10% Sales Growth Complete the pro forma income statements below. (Do not round intermediate calculations and round your answers to the nearest whole number, e.g., 32.) Liabilities and Owners' Equity Current liabilities Accounts payable Notes payable Total Long-term debt Owners' equity Common stock and paid-in surplus Retained earnings $ 113,000 45,520 Total $ 158,520 Total liabilities and owners' equity $360,420 Pro Forma Income Statement $ 64,200 19,700 $ 83,900 $ 118,000 15% Sales Growth 40% Sales Growth
The most recent financial statements for Crosby, Incorporated, 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. Assume the firm is operating at full capacity and the debt- equity ratio is held constant. Sales Costs Other expenses Earnings before interest and taxes Interest paid Taxable income Taxes (22%) Net income Dividends Addition to retained earnings Inventory Total Current assets Cash Accounts receivable CROSBY, INCORPORATED 2020 Income Statement Total assets Sales Costs Fixed assets Net plant and equipment $227,000 Other expenses EBIT Interest paid Taxable income Taxes (22%) Net income $ 32,940 40,926 Dividends Add to RE $ 25,940 35,430 72,050 $ 133,420 CROSBY, INCORPORATED Balance Sheet as of December 31, 2020 Assets $360,420 $ 770,000 626,000 32,500 $ 111,500 16,800 $ 94,700 20,834 $ 73,866 10% Sales Growth Complete the pro forma income statements below. (Do not round intermediate calculations and round your answers to the nearest whole number, e.g., 32.) Liabilities and Owners' Equity Current liabilities Accounts payable Notes payable Total Long-term debt Owners' equity Common stock and paid-in surplus Retained earnings $ 113,000 45,520 Total $ 158,520 Total liabilities and owners' equity $360,420 Pro Forma Income Statement $ 64,200 19,700 $ 83,900 $ 118,000 15% Sales Growth 40% Sales Growth
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
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Financial Ratios
A Ratio refers to a figure calculated as a reference to the relationship of two or more numbers and can be expressed as a fraction, proportion, percentage, or the number of times. When the number is determined by taking two accounting numbers derived from the financial statements, it is termed as the accounting ratio.
Return on Equity
The Return on Equity (RoE) is a measure of the profitability of a business concerning the funds by its stockholders/shareholders. ROE is a metric used generally to determine how well the company utilizes its funds provided by the equity shareholders.
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Question
Ee 247.
Transcribed Image Text:Calculate the EFN for 10, 15 and 40 percent growth rates. (A negative answer should be indicated by a minus sign. Do not
round intermediate calculations and round your answers to the nearest whole number, e.g., 32.)
Transcribed Image Text:The most recent financial statements for Crosby, Incorporated, 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. Assume the firm is operating at full capacity and the debt-
equity ratio is held constant.
Sales
Costs
Other expenses
Earnings before interest and
taxes
Interest paid
Taxable income
Taxes (22%)
Net income
CROSBY, INCORPORATED
2020 Income Statement
Dividends
$ 32,940
Addition to retained earnings 40,926
Current assets
Cash
Accounts receivable
Inventory
Total
Total assets
Fixed assets
Net plant and equipment $227,000
Sales
Costs
Other expenses
EBIT
Interest paid
Taxable income
Taxes (22%)
Net income
Dividends
Add to RE
$ 25,940
35,430
72,050
$133,420
CROSBY, INCORPORATED
Balance Sheet as of December 31, 2020
Assets
$
770,000
626,000
32,500
$111,500
16,800
$ 94,700
20,834
$ 73,866
10% Sales Growth
Liabilities and Owners' Equity
Current liabilities
Accounts payable
Notes payable
Total
Long-term debt
Owners' equity
Common stock and paid-in
surplus
Retained earnings
$ 113,000
45,520
$ 158,520
$360,420 Total liabilities and owners' equity $360,420
Complete the pro forma income statements below. (Do not round intermediate
calculations and round your answers to the nearest whole number, e.g., 32.)
Total
Pro Forma Income Statement
$ 64,200
19,700
$ 83,900
$ 118,000
15% Sales Growth
40% Sales Growth
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