Tutorial 9 Questions - Tutorial 9#1 The most recent financial statements for Summer Tyme Inc are shown here Income Statement Sales Costs Taxable income

Tutorial 9 Questions - Tutorial 9#1 The most recent...

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Tutorial 9 #1: The most recent financial statements for Summer Tyme, Inc., are shown here: Income Statement Balance Sheet Sales $4,200 Current assets $3,600 Current liabilities $2,100 Costs 3,300 Fixed assets 7,900 Long-term debt 3,650 Taxable income $900 Equity 5,750 Taxes (34%) 306 Total $11,500 Total $11,500 Net income $594 Assets, costs and current liabilities are proportional to sales. Long-term debt and equity are not. The company maintains a constant 40% dividend payout ratio. As with every other firm in its industry, next year’s sales are projected to increase by exactly 15%. What is the external financing needed? #2: The most recent financial statements for Live Co. are shown here: Income Statement Balance Sheet Sales $13,250 Current Assets $10,400 Debt $17,500 Costs 9,480 Fixed assets 28,750 Equity 21,650 Taxable income $3,770 Total $39,150 Total $39,150 Taxes (35%) 1,508 Net income $2,262 Assets and costs are proportional to sales. Debt and equity are not.
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  • Summer '14
  • Balance Sheet, Lecture Notes, Generally Accepted Accounting Principles, dividend payout ratio, recent financial statements, St. Pierre

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