1The most recent financial statements for Kerch, Incorporated, are shown here (assumingno income taxes):Income StatementSalesCostsNetincome$ 4,9003,390$ 1,510Balance SheetAssets $15,200 Debt$11,200Equity4,000Total $15,200 Total $15,200Assets and costs are proportional to sales. Debt and equity are not. No dividends arepaid. Next year's sales are projected to be $5,975.What is the external financing needed?

The external financing needed can be calculated using the formula,The growth rate in sales is

The most recent financial statements for Kerch, Incorporated, are shown here (assuming no income taxes): Income Statement Sales Costs Net income $ 4,900 3,390 $ 1,510 Balance Sheet Assets $15,200 Debt Equity Total $15,200 $ 11,200 4,000 Total $15,200 Assets and costs are proportional to sales. Debt and equity are not. No dividends are paid. Next year's sales are projected to be $5,975. What is the external financing needed?

The most recent financial statements for Kerch, Incorporated, are shown here (assuming no income taxes): Income Statement Sales Costs Net income $ 4,900 3,390 $ 1,510 Balance Sheet Assets $15,200 Debt Equity Total $15,200 $ 11,200 4,000 Total $15,200 Assets and costs are proportional to sales. Debt and equity are not. No dividends are paid. Next year's sales are projected to be $5,975. What is the external financing needed?

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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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 $ 110 Accounts receivable $ 200 Inventories $ 250 Total current assets $ 710 Net fixed assets $ 500 Total assets $ 1,210 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. $
Consider the following simplified financial statements for the Wims Corporation (assuming no income taxes): Income Statement Balance Sheet Sales $ 25,000 Assets $ 9,200 Debt $ 4,700 Costs 13,800 Equity 4,500 Net income $ 11,200 Total $ 9,200 Total $ 9,200 The company has predicted a sales increase of 9 percent. It has predicted that every item on the balance sheet will increase by 9 percent as well. Create the pro forma statements and reconcile them. What is the plug variable here?
7. Here is information from the most recent financial statements for your firm: The Income Statement reports a net income of $298, 000. The Balance Sheet show that Assets is $ 740, 000, Liabilities is $125, 000, and Equity is $ 615,000. Your company maintains a 35% retention ratio. If your firm wishes to maintain the same D/E ratio as last year, how much additional debt do you issue? 8. Here is information from the most recent financial statements for your firm: The Income Statement reports a net income of $298,000. The Balance Sheet show that Assets is $740, 000, Liabilities is $125,000, and Equity is $615,000. Your company maintains a 35% retention ratio. What is the firm's internal growth rate?
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 $140 Accounts receivable $300 Inventories $300 Total current assets $890 Net fixed assets $600 Total assets $1,490 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.
At last year’s end, total assets for Roberts Inc. were $1.2 million and accounts payable were $375,000. Sales, which last year were $2.5 million, are expected to increase by 25 percent this year. Total assets and accounts payable are proportional to sales, and that relationship will be maintained. Robert Inc. typically uses no current liabilities other than accounts payable. Common stock amounted to $425,000 last year, and retained earnings were $295,000. Roberts Inc. plans to sell new common stock in the amount of $75,000. The Firm’s profit margin on sales is 6 percent; and 60 percent of earnings will be retained. Set up Roberts Inc.’s last year balance sheet, to the extent possible, based on the information provided in this problem. Based on the balance sheet setup in Part a above, determine how much was Roberts Inc.’s long-term debt last year? Perform financial forecasting using percent of sales method (i.e., constant ratio method; do not use the AFN Equation) to determine how much…
Wims, Inc., has sales of $19.9 million, total assets of $14.9 million and total debt of $5.7 million. The profit margin is 12 percent. a. What is the company's net income? (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to the nearest whole number, e.g., 1,234,567.) b. What is the company's ROA? (Do not round intermediate calculations and enter your answer as a percent rounded 2 decimal places, e.g., 32.16.) C. What is the company's ROE? (Do not round intermediate calculations and enter your answer as a percent rounded 2 decimal places, e.g., 32.16.) Net income a. b. ROA C. ROE % %
Ehrlich & Czarnecki Consulting, Inc. recently reported the following information: Net income = $800,000 Sales = $4,200,000 Total Assets = $9.5 million Tax rate = 40% Interest expense = 20,000 Accounts Payable = 36,000 Notes Payable = 300,000 Accruals = 50,000 After-tax cost of capital = 11% What is the company’s EVA? $-296,358 $-223,540 $-452,391 $-488,029 None of the above is within $100 of the correct answer.
Broward Manufacturing recently reported the following information: Net income ROA BEP: 26.73 Interest expense $102,120 Accounts payable and accruals $950,000 Broward's tax rate is 25%. Broward finances with only debt and common equity, so it has no preferred stock. 40% of its total invested capital is debt, and 60% of its total invested capital is common equity. Calculate its basic earning power (BEP), its return on equity (ROE), and its return on invested capital (ROIC). Do not round intermediate calculations. Round your answers to two decimal places. ROE: 73.60 ROIC: 44.55 % % $276,000 % 8%
(DuPont analysis) Dearborn Supplies has total sales of $197 million, assets of $109 million, a return on equity of 34 percent, and a net profit margin of 7.2 percent. What is the firm's debt ratio? The company's debt ratio is %. (Round to one decimal place.)
Last year Harrington Inc. had sales of $325,000 and a net income of $19,000, and its year-end assets were $250,000. The firm's total-debt-to-total-capital ratio was 17.5%. The firm finances using only debt and common equity, and its total assets equal total invested capital. Based on the DuPont equation, what was the ROE? Do not round your intermediate calculations. O a. 9.49% O b. 11.52% O c. 9.21% O d. 7.74% O e. 9.86%
(Using common-size financial statements) The S&H Construction Company expects to have total sales next year totaling $14,500,000. In addition, the firm pays taxes at 35 percent and will owe $306,000 in interest expense. Based on last year's operations the firm's management predicts that its cost of goods sold will be 60 percent of sales and operating expenses will total 26 percent. What is your estimate of the firm's net income (after taxes) for the coming year? Pro-Forma Income Statement Sales Cost of goods sold Gross profit Operating expenses Net operating income Interest expense Earnings before taxes Taxes Net income $ $ $ $ $
The most recent financial statements for Mandy Company are shown below: Balance Sheet $ 32,000 Debt 93,200 Equity $ 125,200 Total Income Statement Sales Costs Taxable income Tax (218) Net Income $91,200 Current assets 66,150 Fixed assets $ 25,050 5,261 Total $ 19,789 Sustainable growth rate Assets and costs are proportional to sales. Debt and equity are not. The company maintains a constant 35 percent dividend payout ratio. No external equity financing is possible. What is the sustainable growth rate? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. $ 42,000 83,200 $ 125,200 %

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