ENG 111 Winter 2014 HW 2

Net working capital should increase by 10 from 2013

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Unformatted text preview: as a percentage of sales, rather, the financial manager decides on how to fund the increases in the assets sides to support the projected sales. What should the manager do to balance the Balance Sheet if the following constraints need to be satisfied: 1. Net Working Capital should increase by 10% from 2013 to 2014. 2. No new shares should be issued. 3. Retention Ratio should stay the same as in 2013. Company Y, Pro Forma Income Statement 2012 2013 (Projected) Sales $1,000 1,250 Costs 800 1,000 Taxable Income 200 Taxes(34%) 68 Net Income 132 Dividends 44 Additions to Retained Earnings 88 Company Y, Pro Forma Balance Sheet % of 2013 2012 %of 1 Sales Step Current Assets Current Liabilities 300 100 30% n/a 375 2013 (Projecte d) Current 400 n/a st 2012 Sales 160 440 16% 44% (Projecte d) 200 550...
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This note was uploaded on 01/16/2014 for the course ENGR 111 taught by Professor King during the Winter '09 term at UCLA.

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