Ch003 - Chapter 3 Financial Planning and Growth 3.1 From...

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Chapter 3: Financial Planning and Growth 3.1 From the relationship, S = .00001 x GNP, we can get forecast sales: S = 0.00001; GNP = 0.00001 ($2,050 trillion) = $20,500,000 Now, compute the other values: Projected Current Assets = Current Assets + Current Assets: CA = $500,000 + 0.25 ($20,500,000) = $5,625,000 Similar for rest: FA = $1,000,000 + 0.50 ($20,500,000) = $11,250,000 CL = $100,000 + 0.10 ($20,500,000) = $2,150,000 and: NP = 0.02 ($20,500,000) = $410,000 Compute the new amount of retained earnings: RE = NP ( 1 - dvd payout ratio) = NP (1 - 0.34) = $410,000 (0.66) = $270,600 RE = $3,400,000 + $270,600 = $3,670,600 Compute the new amount of bonds: Debt-to-Asset Ratio = Total Debt / Total Assets = ($1,100,000 + $2,500,000) / ($3,000,000 + $6,000,000) = 0.40 Bonds = [ Total Assets x Debt/Asset ratio ] - Current Liabilities = [(CA + FA) x 0.40] - CL = ($5,625,000 + $11,250,000) (0.40) - $2,150,000 = $4,600,000 Compute the new amount of stock: Use: Total Assets Total Liabilities + Total Equity, then Stock = [(CA + FA) - (CL + Bonds + RE)] = ($5,625,000 + $11,250,000) - ($2,150,000 + 4,600,000 + 3,670,600) = $6,454,400 And now we can use the above to fill in the Balance Sheet:
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Ch003 - Chapter 3 Financial Planning and Growth 3.1 From...

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