The Optical Scam Company has forecast a sales growth rate of 20 percent for next year. The current financial statements are shown here: Income Statement Sales $ 31,800,000 Costs 27,003,300 _______________________________________ – 2024
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2024 – The Optical Scam Company has forecast a sales growth rate of 20 percent for next year The current financial statements. The Optical Scam Company has forecast a sales growth rate of 20 percent for next year. The current financial statements are shown here: |
>income statementIncome Statement |
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Sales |
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$ |
31,800,000 |
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Costs |
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27,003,300 |
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Taxable income |
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$ |
4,796,700 |
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Taxes |
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1,678,845 |
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Net income |
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$ |
3,117,855 |
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Dividends |
$ |
1,247,142 |
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Addition to retained earnings |
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1,870,713 |
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Balance Sheet |
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Assets |
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Liabilities and Equity |
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Current assets |
$ |
7,340,000 |
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Short-term debt |
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5,088,000 |
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Long-term debt |
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2,345,250 |
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Fixed assets |
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19,372,000 |
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Common stock |
$ |
5,924,750 |
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Accumulated retained earnings |
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13,354,000 |
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Total equity |
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19,278,750 |
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Total assets |
$ |
26,712,000 |
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Total liabilities and equity |
$ |
26,712,000 |
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a. |
Calculate the external financing needed for next year. (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) |
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External financing needed |
$ [removed] |
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b-1. |
Prepare the firm’s pro forma balance sheet for next year. (Do not round intermediate calculations and round your answers to the nearest whole number, e.g., 32.) |
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Balance Sheet |
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Assets |
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Liabilities and equity |
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Current assets |
$ [removed] |
Short-term debt |
$ [removed] |
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Long-term debt |
[removed] |
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Fixed assets |
[removed] |
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Common stock |
$ [removed] |
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Accumulated retained earnings |
[removed] |
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Total equity |
[removed] |
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Total assets |
$ [removed] |
Total liabilities and equity |
$ [removed] |
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b-2. |
Calculate the external financing needed. (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) |
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External financing needed |
$ [removed] |
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c. |
Calculate the sustainable growth rate for the company based on the current financial statements. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) |
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Sustainable growth rate |
[removed] % |
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