Homework Answers
| The pro forma income statement for each of the growth rate is shown below | ||||||
| 20% Sales growth | Calculation | 25% sales growth | Calculation | 30% sales growth | Calculation | |
| Sales | $913,200 | 761000*1.20 | $951,250 | 761000*1.25 | $989,300 | 761000*1.30 |
| Costs | $740,400 | 617000*1.20 | $771,250 | 617000*1.25 | $802,100 | 617000*1.30 |
| Other expenses | $33,600 | 28000*1.20 | $35,000 | 28000*1.25 | $36,400 | 28000*1.30 |
| EBIT | $139,200 | $145,000 | $150,800 | |||
| Interest | $13,200 | $13,200 | $13,200 | |||
| Taxable income | $126,000 | $131,800 | $137,600 | |||
| Taxes (23%) | $28,980 | $30,314 | $31,648 | |||
| Net income | $97,020 | $101,486 | $105,952 | |||
| Dividends | $33,878 | (27640/79156)*97020 | $35,437 | (27640/79156)*35437 | $36,997 | (27640/79156)*105952 |
| Add to RE | $63,142 | $66,049 | $68,955 | |||
| External financing needed | Increase in assets - (Increase in accounts payable+Increase in retained earnings) | |||||
| 20% Sales growth | Calculation | 25% sales growth | Calculation | 30% sales growth | Calculation | |
| Increase in assets | $69,744 | 348720*20% | $87,180 | 348720*25% | $104,616 | 348720*30% |
| Increase in accounts payable | $12,120 | 60600*20% | $15,150 | 60600*25% | $18,180 | 60600*30% |
| Addition to retained earnings | $63,142 | $66,049 | $68,955 | |||
| External financing needed | -$5,518 | $5,981 | $17,481 | |||
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The most recent financial statements for Crosby, Inc., follow. Interest expense will remain constant the tax...
The most recent financial statements for Crosby, Inc., follow. Interest expense will remain constant the tax...
The most recent financial statements for Crosby, Inc., follow. Interest expense will remain constant the tax rate and the dividend payout rate will also remain constant. Costs. other expenses, current assets, fixed assets, and accounts payable increase spontaneously with sales. CROSBY, INC. 2017 Income Statement Sales Costs Other expenses $761.000 617,000 28,000 Earnings before interest and taxes Interest paid $ 116,000 13,200 Taxable income Taxes (23%) $102,800 23,644 Net income $ 79,156 Dividends Addition to retained earnings $27,640 51,516 CROSBY,...
The most recent financial statements for Crosby, Inc., follow. Interest expense will remain constant; the tax...
The most recent financial statements for Crosby, Inc., follow.
Interest expense will remain constant; the tax rate and the
dividend payout rate will also remain constant. Costs, other
expenses, current assets, fixed assets, and accounts payable
increase spontaneously with sales.
CROSBY, INC. 2017 Income Statement Sales Costs Other expenses $ 767,000 623,000 31,000 Earnings before interest and taxes Interest paid $ 113,000 15,600 Taxable income Taxes (24%) $ 97,400 23,376 Net income $ 74,024 Dividends Addition to retained earnings $23,440...
The most recent financial statements for Crosby, Inc., follow. Interest expense will remain constant; the tax...
The most recent financial statements for Crosby, Inc., follow. Interest expense will remain constant; the tax rate and the dividend payout rate will also remain constant. Costs, other expenses, current assets, fixed assets, and accounts payable increase spontaneously with sales. Assume the firm is operating at full capacity and the debt- equity ratio is held constant. CROSBY, INC. 2017 Income Statement $763,000 619,000 29,000 Sales Costs Other expenses Earnings before interest and taxes $115,000 Interest paid 14,000 $101,000 25,250 Taxable...
The most recent financial statements for Crosby, Inc., follow. Interest expense will remain constant; the tax...
The most recent financial statements for Crosby, Inc., follow. Interest expense will remain constant; the tax rate and the dividend payout rate will also remain constant. Costs, other expenses, current assets, fixed assets, and accounts payable increase spontaneously with sales. CROSBY, INC. 2017 Income Statement Sales Costs Other expenses $ 767,000 623,000 31,000 Earnings before interest and taxes Interest paid $ 113,000 15,600 Taxable income Taxes (24%) $ 97,400 23,376 Net income $ 74,024 Dividends Addition to retained earnings $23.440...
The most recent financial statements for Crosby, Inc., follow. Interest expense will remain constant, the tax...
The most recent financial statements for Crosby, Inc., follow. Interest expense will remain constant, the tax rate and the dividend payout rate will also remain constant. Costs, other expenses, current assets, fixed assets, and accounts payable increase spontaneously with sales. CROSBY, INC. 2017 Income Statement Sales $ 767,000 Costs 623,000 Other expenses 31,000 Earnings before interest and taxes Interest paid $ 113,000 15,600 Taxable income Taxes (24%) $ 97,400 23,376 Net income $ 74,024 Dividends Addition to retained earnings $23.440...
The most recent financial statements for Crosby, Inc., follow. Interest expense will remain constant; the tax...
The most recent financial statements for Crosby, Inc., follow. Interest expense will remain constant; the tax rate and the dividend payout rate will also remain constant. Costs, other expenses, current assets, fixed assets, and accounts payable increase spontaneously with sales. CROSBY, INC. 2017 Income Statement Sales Costs Other expenses $ 772,000 628,000 33,500 Earnings before interest and taxes Interest paid $ 110,500 17,600 Taxable income Taxes (24%) $ 92,900 22.296 Net income $ 70,604 Dividends Addition to retained earnings $...
The most recent financial statements for Crosby, Inc., follow. Interest expense will remain constant; the tax...
The most recent financial statements for Crosby, Inc., follow. Interest expense will remain constant; the tax rate and the dividend payout rate will also remain constant. Costs, other expenses, current assets, fixed assets, and accounts payable increase spontaneously with sales. Assume the firm is operating at full capacity and the debt- equity ratio is held constant. CROSBY, INC 2017 Income Statement Sales Costs Other expenses $754,000 610,000 24,500 Earnings before interest and taxes Interest paid $ 119,500 10,400 Taxable income...
The most recent financial statements for Crosby, Inc., follow. Interest expense will remain constant, the tax...
The most recent financial statements for Crosby, Inc., follow. Interest expense will remain constant, the tax rate and the dividend payout rate will also remain constant. Costs. other expenses current assets, fixed assets and accounts payable increase spontaneously with sales. Assume the firm is operating at full capacity and the debt equity ratio is held constant. CROSBY, INC. 2017 Income Statement Sales Costs Other expenses $755,000 611,000 25.000 Earnings before interest and taxes Interest paid $ 119,000 10,800 Taxable income...
The most recent financial statements for Crosby, Inc., follow. Interest expense will remain constant, the tax...
The most recent financial statements for Crosby, Inc., follow. Interest expense will remain constant, the tax rate and the dividend payout rate will also rem other expenses, current assets, fixed assets, and accounts payable increase spontaneously with sales. Assume the firm is operating at full capacity and the debt- equity ratio is held constant. CROSBY, INC. 2017 Income Statement Sales Costs Other expenses $755,000 611,000 25,000 Earnings before interest and taxes Interest paid $ 119,000 10,800 Taxable income Taxes (22%)...
The most recent financial statements for Crosby, Inc., follow. Interest expense will remain constant; the tax...
The most recent financial statements for Crosby, Inc., follow. Interest expense will remain constant; the tax rate and the dividend payout rate will also remain constant. Costs, other expenses, current assets, fixed assets, and accounts payable increase spontaneously with sales. CROSBY, INC. 2017 Income Statement Sales $ 768,000 Costs 624,000 Other expenses 31,500 Earnings before interest and taxes $ 112,500 Interest paid 16,000 Taxable income $ 96,500 Taxes (25%) 24,125 Net income $ 72,375 Dividends $ 22,740 Addition to retained...
The most recent financial statements for Crosby, Inc., follow. Interest expense will remain constant the tax rate and the dividend payout rate will also remain constant. Costs. other expenses, current assets, fixed assets, and accounts payable increase spontaneously with sales. CROSBY, INC. 2017 Income Statement Sales Costs Other expenses $761.000 617,000 28,000 Earnings before interest and taxes Interest paid $ 116,000 13,200 Taxable income Taxes (23%) $102,800 23,644 Net income $ 79,156 Dividends Addition to retained earnings $27,640 51,516 CROSBY,...
The most recent financial statements for Crosby, Inc., follow.
Interest expense will remain constant; the tax rate and the
dividend payout rate will also remain constant. Costs, other
expenses, current assets, fixed assets, and accounts payable
increase spontaneously with sales.
CROSBY, INC. 2017 Income Statement Sales Costs Other expenses $ 767,000 623,000 31,000 Earnings before interest and taxes Interest paid $ 113,000 15,600 Taxable income Taxes (24%) $ 97,400 23,376 Net income $ 74,024 Dividends Addition to retained earnings $23,440...
The most recent financial statements for Crosby, Inc., follow. Interest expense will remain constant; the tax rate and the dividend payout rate will also remain constant. Costs, other expenses, current assets, fixed assets, and accounts payable increase spontaneously with sales. Assume the firm is operating at full capacity and the debt- equity ratio is held constant. CROSBY, INC. 2017 Income Statement $763,000 619,000 29,000 Sales Costs Other expenses Earnings before interest and taxes $115,000 Interest paid 14,000 $101,000 25,250 Taxable...
The most recent financial statements for Crosby, Inc., follow. Interest expense will remain constant; the tax rate and the dividend payout rate will also remain constant. Costs, other expenses, current assets, fixed assets, and accounts payable increase spontaneously with sales. CROSBY, INC. 2017 Income Statement Sales Costs Other expenses $ 767,000 623,000 31,000 Earnings before interest and taxes Interest paid $ 113,000 15,600 Taxable income Taxes (24%) $ 97,400 23,376 Net income $ 74,024 Dividends Addition to retained earnings $23.440...
The most recent financial statements for Crosby, Inc., follow. Interest expense will remain constant, the tax rate and the dividend payout rate will also remain constant. Costs, other expenses, current assets, fixed assets, and accounts payable increase spontaneously with sales. CROSBY, INC. 2017 Income Statement Sales $ 767,000 Costs 623,000 Other expenses 31,000 Earnings before interest and taxes Interest paid $ 113,000 15,600 Taxable income Taxes (24%) $ 97,400 23,376 Net income $ 74,024 Dividends Addition to retained earnings $23.440...
The most recent financial statements for Crosby, Inc., follow. Interest expense will remain constant; the tax rate and the dividend payout rate will also remain constant. Costs, other expenses, current assets, fixed assets, and accounts payable increase spontaneously with sales. CROSBY, INC. 2017 Income Statement Sales Costs Other expenses $ 772,000 628,000 33,500 Earnings before interest and taxes Interest paid $ 110,500 17,600 Taxable income Taxes (24%) $ 92,900 22.296 Net income $ 70,604 Dividends Addition to retained earnings $...
The most recent financial statements for Crosby, Inc., follow. Interest expense will remain constant; the tax rate and the dividend payout rate will also remain constant. Costs, other expenses, current assets, fixed assets, and accounts payable increase spontaneously with sales. Assume the firm is operating at full capacity and the debt- equity ratio is held constant. CROSBY, INC 2017 Income Statement Sales Costs Other expenses $754,000 610,000 24,500 Earnings before interest and taxes Interest paid $ 119,500 10,400 Taxable income...
The most recent financial statements for Crosby, Inc., follow. Interest expense will remain constant, the tax rate and the dividend payout rate will also remain constant. Costs. other expenses current assets, fixed assets and accounts payable increase spontaneously with sales. Assume the firm is operating at full capacity and the debt equity ratio is held constant. CROSBY, INC. 2017 Income Statement Sales Costs Other expenses $755,000 611,000 25.000 Earnings before interest and taxes Interest paid $ 119,000 10,800 Taxable income...
The most recent financial statements for Crosby, Inc., follow. Interest expense will remain constant, the tax rate and the dividend payout rate will also rem other expenses, current assets, fixed assets, and accounts payable increase spontaneously with sales. Assume the firm is operating at full capacity and the debt- equity ratio is held constant. CROSBY, INC. 2017 Income Statement Sales Costs Other expenses $755,000 611,000 25,000 Earnings before interest and taxes Interest paid $ 119,000 10,800 Taxable income Taxes (22%)...
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