Bundle: Intermediate Financial Management, 13th + MindTap Finance, 1 term (6 months) Printed Access Card
13th Edition
ISBN: 9781337817332
Author: Brigham, Eugene F., Daves, Phillip R.
Publisher: Cengage Learning
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Chapter 9, Problem 9P
a)
Summary Introduction
To determine: Projected financial statement of the company for 2019.
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Pro forma balance sheet Peabody & Peabody has 2019 sales of $10 million. It wishes to analyze expected performance and financing needs for 2021, which is 2 years ahead. Given the following information, respond to parts a and b.
(1) The percent of sales for items that vary directly with sales are as follows: Accounts receivable, 12% Inventory, 18% Accounts payable, 14% Net profit margin, 3%
(2) Marketable securities and other current liabilities are expected to remain unchanged.
(3) A minimum cash balance of $480,000 is desired.
(4) A new machine costing $650,000 will be acquired in 2020, and equipment costing $850,000 will be purchased in 2021. Total depreciation in 2020 is forecast as $290,000, and in 2021 $390,000 of depreciation will be taken.
(5) Accruals are expected to rise to $500,000 by the end of 2021.
(6) No sale or retirement of long-term debt is expected.
(7) No sale or repurchase of common stock is expected.
(8) The dividend payout of 50% of net profits is expected to…
Pro forma balance sheet Peabody & Peabody has
2019
sales of
$10.5
million. It wishes to analyze expected performance and financing needs for
2021—2
years ahead. Given the following information, respond to parts a. and b.
(1) The percents of sales for items that vary directly with sales are as follows: Accounts receivable;
11.9%,
Inventory;
17.7%;
Accounts payable,
13.6%;
Net profit margin,
3.5%.
(2) Marketable securities and other current liabilities are expected to remain unchanged.
(3) A minimum cash balance of
$482,000
is desired.
(4) A new machine costing
$653,000
will be acquired in
2020,
and equipment costing
$848,000
will be purchased in
2021.
Total depreciation in
2020
is forecast as
$288,000,
and in
2021
$388,000
of depreciation will be taken.
(5) Accruals are expected to rise to
$504,000
by the end of
2021.
(6) No sale or retirement of long-term debt is expected.
(7) No sale or repurchase of common stock is expected.
(8) The dividend payout of…
Assume the company uses the AFN formula and all additional funds needed (AFN) will come from issuing new long-term debt. Given its forecast, how much long-term debt will the company have to issue in 2023?
Lux Co. has the following balance sheet as of December 31, 2022
Chapter 9 Solutions
Bundle: Intermediate Financial Management, 13th + MindTap Finance, 1 term (6 months) Printed Access Card
Ch. 9 - Define each of the following terms:
Operating...Ch. 9 - Prob. 2QCh. 9 - Prob. 3QCh. 9 - Prob. 4QCh. 9 - Prob. 5QCh. 9 - Prob. 6QCh. 9 - Broussard Skateboard’s sales are expected to...Ch. 9 - AFN Equation Refer to Problem 9-1. What would be...Ch. 9 - AFN Equation Refer to Problem 9-1. Return to the...Ch. 9 - Sales Increase Maggies Muffins Bakery generated 5...
Ch. 9 - Long-Term Financing Needed At year-end 2018,...Ch. 9 - Additional Funds Needed
The Booth Company’s sales...Ch. 9 - Forecasted Statements and Ratios Upton Computers...Ch. 9 - Financing Deficit
Stevens Textile Corporation’s...Ch. 9 - Prob. 9PCh. 9 - Hatfield Medical Supplys stock price had been...Ch. 9 - Prob. 2MCCh. 9 - Define the term capital intensity. Explain how a...
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