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FINAL PROJECT FINC5880_Advanced Corporate Finance By the end of 2017, top management of the company have received both balance sheet and income statements, and they we were not were pleased with what they saw. This can be seen by the fact that I was required to come up with funds needed in order for the company grow in sales for 60%.
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Balance sheet Assets and liabilities and equities in 2017 Assets Libailities and equity Cash & sec. € 100 Accts. pay. & accruals € 300 Accounts rec. 400 Notes payable 300 Inventories 500 Total CL € 600 Total CA € 1000 L-T debt 700 Net fixed Assets 800 Common stk 300 Retained Earnings 200 Total assets € 1 800 Total claims € 1 800 Income statement Sales 3000 Less: COGS (60%) 1800 SGA costs 600 EBIT 600 Interest 40 EBT 560 Taxes (30%) 168 Net income 392 Dividends (20%) 78,4 Add’n to RE 313,6 The best way to come up with funds needed is to use the AFN equation. The equation will give us the amount of money that must be raised externally to finance the increase in assets followed by the increase in sales. In order for the company to have a better perspective about
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