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Corporate Finance

Diana Dune, CFO of Rose Florist Ltd., has created the company's pro forma balance sheet for the next fiscal year. Sales are projected to grow 15 percent to $ 620 million. Current assets, fixed assets, and short-term debt are 25 percent, 80 percent, and 20 percent of sales, respectively. Rose florist shop pays 30 percent of its net profit in dividends. The company currently has $ 140 million in long-term debt and $ 68 million in par value for common stock. The profit margin is 10 percent.

a. Create a current balance sheet for the company using projected sales figures.

b. Based on Ms. Dune, how much does Rose Florist need external funding for the coming fiscal year?

c. Construct the company's pro forma balance sheet for the next fiscal year and confirm the required external funds you calculated in section (b).


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