Ch_04_HW_A_Solutions

Ch_04_HW_A_Solutions - Ch 04 HW A Solutions 1 4. Sales...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Ch 04 HW Solutions 1 Ch 04 HW A Solutions 1 – 4. Sales Increase = 5,500.00 / 5,000.00 = 1.100000000 – 1.00 = 0.1 = 10.00% 1. Pro Forma Income Statement Sales 5,500.00 Costs 4,510.00 (4,100.00 x 1.100000000) Net Inc 990.00 Pro Forma Net Income = 990.00 2. Pro Forma Total Assets = 21,000.00 x 1.100000000 = 23,100.00 3. Pro Forma Equity Beginning Equity 4,900.00 + Increase in Retained Earnings 990.00 (There are no dividends, all net income is reinvested) Pro Forma Equity 5,890.00 Pro Forma Equity = 5,890.00 4. External Funds Needed: Pro Forma Balance Sheet Balance Sheet Assets 23,100.00 Debt 16,100.00 Equity (3) 5,890.00 Total 21,990.00 EFN 1,110.00 Total (2) 23,100.00 Total 23,100.00 4. External Funds Needed = 1,110.00 5. Pro Forma Income Statement Sales 7,314.00 Cost 6,731.00 Taxable Income 583.00 Tax Rate 30.00% Taxes 174.90 Net Income (5) 408.10 Sales = 6,900 x (1 + 0.060) Cost = 6,350 x (1 + 0.060) Tax = 583.00 x 0.30 6. Pro Forma Dividends: 134.67 (Net Inc x Div Payout Ratio = 408.10 x 0.33) 7. Pro Forma Increase in Retained Earnings: 273.43 (Net Income – Dividends = 408.10 – 134.67)
Background image of page 1

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

View Full DocumentRight Arrow Icon
Ch 04 HW Solutions 2 8. Pro Forma Total Assets: Current Assets 4,770.00 [4,500.00 x (1 + 0.060)] Fixed Assets 3,710.00 [3,500.00 x (1 + 0.060)] Total Assets 8,480.00 9. Pro Forma Current Liabilities: 424.00 = [400.00 x (1 + 0.060)] 10. Pro Forma Equity: Beginning Equity 5,600.00 + Net Income 408.10 - Dividends 134.67 Ending Equity 5,873.43 11. External Funds Needed:
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 11/29/2011 for the course FINANCE 332 taught by Professor Linney during the Fall '11 term at Guilford Tech.

Page1 / 5

Ch_04_HW_A_Solutions - Ch 04 HW A Solutions 1 4. Sales...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online