Winter 2011 - Session One Handout[1]

Winter 2011 - Session One Handout[1] - [2] Find the Gross...

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SESSION 1 PRACTICE PROBLEMS DATA Sales 100 Cost of Goods solid 10 Gross Profit 90 OPEX 20 EBIT 70 INT 10 TAX 10 NI 50
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EFN FORMULA: EFN = (ASSETS/SALES)x (CHANGES IN SALES) – (SPONTANEOUS  LIABILITIES/SALES)x(CHANGES IN SALES) – (PROFIT MARGIN * PROJECTED SALES ) x  (1- DIVIDEND RATE) = 75/100 * 10 – 10/100 * 10 – (50/100 * 110) x (1-0.10) see  http://en.wikipedia.org/wiki/Additional_Funds_Needed   http://www.ehow.com/how_5862354_calculate-external-financing-needed-_efn_.html   [references that will help you calculate] SAMPLE PROBLEMS [1]Find the Profit Margin: (NI/SALES) = 50/100
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Unformatted text preview: [2] Find the Gross Margin: (GROSS PROFIT/SALES): 90/100 [3] Find the ROE using the dupont identity: (TAT)*(PM)*(EM )= SALES/ASSETS * NETINCOME/SALES * ASSETS/TOTAL EQUITY = 100/75 * 50/100 * 75/55 [4] Find the Pro-Forma if Sales goes up by 10%, OPEX/INT/TAX/COGS all the same dollar value. Find the EFN of the Pro-Forma Balance sheet, if dividend payments are 10% Pro-Forma Balance Sheet: Sales 100 110 Cost of Goods solid 10 Gross Profit 100 OPEX 20 EBIT 90 INT 10 TAX 10 NI 70...
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Winter 2011 - Session One Handout[1] - [2] Find the Gross...

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