FIN2004 Tutorial 9 - NUS Business School FIN2004 Finance Tutorial 9#1 The most recent financial statements for GPS Inc are provided below Income

FIN2004 Tutorial 9 - NUS Business School FIN2004 Finance...

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1 NUS Business School FIN2004 Finance Tutorial 9 #1: The most recent financial statements for GPS, Inc., are provided below: Income Statement Balance Sheet Sales $19,500 Current assets $98,000 Debt $52,500 Costs 15,000 - Taxable income $4,500 Equity 45,500 Taxes (40%) 1,800 Total $98,000 Total $98,000 Net income $2,700 Assets and costs are proportional to sales. Debt and equity are not. A dividend of $1,400 was paid, and the company wishes to maintain a constant payout ratio. Next year’s sales are projected to be $21,840. What is the external financing needed? #2: The most recent financial statements for Summer Tyme, Inc., are provided below: Income Statement Balance Sheet Sales $4,200 Current assets $3,600 Current liabilities $2,100 Costs 3,300 Fixed assets 7,900 Long-term debt 3,650 Taxable income $900 Equity 5,750 Taxes (34%) 306 Total $11,500 Total $11,500 Net income $594 Assets, costs and current liabilities are proportional to sales. Long-term debt and equity are not. The company maintains a constant 40% dividend payout ratio. As with every other firm in its
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  • Spring '11
  • tohmunheng
  • Finance, Balance Sheet, Generally Accepted Accounting Principles, payout ratio, NUS BUSINESS SCHOOL, recent financial statements

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