Winter 2011 - Session One Handout[1]

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

This preview shows pages 1–4. Sign up to view the full content.

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

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
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

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
This is the end of the preview. Sign up to access the rest of the document.

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...
View Full Document

{[ snackBarMessage ]}

### Page1 / 4

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

This preview shows document pages 1 - 4. Sign up to view the full document.

View Full Document
Ask a homework question - tutors are online