Chapter_16_Financial_Forecasting_Problem_Answers

Chapter_16_Financial_Forecasting_Problem_Answers -...

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Chapter 16  Financial Forecasting Problems 1. Barton Corp. expects their 2009 sales to increase by 30% over 2008.  During 2009, they expect  Cost of Goods Sold to be 80% of sales and their dividend payout ratio will remain the same as  in 2008.  What is the External Financing Needed for 2009?  The Income Statement and Balance  Sheet for 2008 are shown below: 2009 Income Statement: Sales $5,000 $6,500 COGS   3,800     5,200 EBIT   1,200 1,300 Taxes (25%)      300     325 Net Income        $900 975 Added to R/E’s        $540  (60%) 585 Dividends paid    $360  (40%)      2009 2009 Balance Sheet:  Current Assets $6,000 A/P         $1,100 1,430       Fixed Assets  10,000 S-T Notes Payable 1,500 1,500 Total            $16,000      $20,800 L-T Debt 6,500 6,500 Common Stock   4,200 4,200 R/E 2,700 3,285     Total        $16,000 16,915 External Financing Needed = $20,800 – 16,915 = $3,885 2.   Jensen Corp. expects their 2009 sales to increase by 30% over 2008.  During 2009, they expect 
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