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Wildcats R Us is preparing their financial forecasts for 2019. It has been a good year for the company, and with their strong NCAA Tournament run, they anticipate sales growth of 22% next year. Assume the firm will pay dividends of 75,000 in 2019 and that they were operating at full capacity in 2018. In addition, assume that any new debt will be added at the end of the year (forecast interest expense based on the year-end debt for 2018) with a rate of 11.5%. Your job is to forecast the firms financing needs (if any) to support that growth. In order to do so, please complete the forecast financial statements provided. Does the firm need additional financing to support their growth? If so, how much?


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2020-07-03_0735.png
INCOME STATEMENT
2018
2019 (forecast)
Sales
787,000
COGS
590,250
EBIT
196,750
Interest
18,280
EBT
178,470
Taxes @ 40%
71,388
Net income
107,082
Dividends
67,000
Pro Forma Balance Sheet
2018
2019 (forecast)
Current Assets
Cash
152,000
Receivables
174,000
Inventories
193,000
Total current assets
519,000
Net Fixed Assets
775,000
Total Assets
1,294,000
Liabilities
Accounts Payable
145,000
Notes Payable
150,000
Accruals
97,000
Total current liabilities
392,000
Common stock
800,000
Retained Earnings
204,000
Total Liabilities & OE
1,396,000
Additional Funds Needed
na

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Subject: Business, Finance

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