Pro Forma Statements

Pro Forma Statements - Name:GeorgiaMoore Date:3/4/2010

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Name: Georgia Moore Date: 3/4/2010 Assignment: Pro Forma Statements A. How much additional external capital will be required for next year if sales increase 15 percent? Increase in sale= 100*15%=$15 Million Increase in assets=5%+15%+25%+40%=85% Increase in Liabilities=10%+15%=25% Need for External Financing = 15*85%-15*25%-115*6%*(1-.50) =5.55 Millions  B. What will happen to external fund requirements if Landis Corporation reduces the payout ratio, grows at a slower rate, or suffers a decline in its profit margin? Discuss each of these separately. When payout ratio is reduced more earning would be retained so the need for external financing  would reduce. If it grows at a sloer rate the need for total additional net asset would reduce so the need for  external financing would reduce. If it suffers a decline its profit margin would reduce so the need for external financing would 
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This note was uploaded on 05/13/2011 for the course FIN 200 taught by Professor Williams during the Spring '08 term at University of Phoenix.

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Pro Forma Statements - Name:GeorgiaMoore Date:3/4/2010

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