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’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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
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
| 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 debt | 319,456 | ||||||||
| Common Stock | 200,000 | ||||||||
| 307,627 | |||||||||
| Total liabilities & equity | $994,409 | ||||||||
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 2 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education