Use this table to answer this question (All are stated in million dollars)
Quantum Inc. Balance Sheet |
2020 |
2019 |
Quantum Inc. Balance Sheet |
2020 |
2019 |
|||
Cash and cash equivalents |
2,768 |
2,879 |
Accounts payable |
8,022 |
7,251 |
|||
Accounts receivable |
6,275 |
5,335 |
Accruals |
9,290 |
8,559 |
|||
Total inventories |
7,379 |
6,384 |
Notes Payables |
9,981 |
8,472 |
|||
Prepaid expenses |
5,548 |
4,184 |
Long-term debt |
22,033 |
21,360 |
|||
TOTAL CURRENT ASSETS |
21,970 |
18,782 |
Other borrowings |
21,027 |
21,091 |
|||
Net Property Plants (Net PPE) |
21,293 |
19,244 |
Common stock+ paid in Cap |
58,134 |
58,134 |
|||
Intangible assets |
95,091 |
90,146 |
Retained earnings |
9,867 |
3,305 |
|||
TOTAL ASSETS |
138,354 |
128,172 |
TOTAL LIAB & EQUITY |
138,354 |
128,172 |
|||
Quantum Inc. Income Statement |
2020 |
2019 |
||||||
NET SALES |
82,559 |
78,938 |
||||||
Cost of products sold |
40,768 |
37,919 |
||||||
Selling, general and administrative expense |
23,135 |
21,890 |
||||||
Depreciation expense |
2,838 |
3,108 |
||||||
OPERATING INCOME |
15,818 |
16,021 |
||||||
Interest expense |
629 |
974 |
||||||
EARNINGS BEFORE INCOME TAXES |
15,189 |
15,047 |
||||||
Income taxes |
3,392 |
3,360 |
||||||
NET INCOME |
11,797 |
11,687 |
||||||
Total Dividends Payments |
5,235 |
5,186 |
||||||
Suppose the expected growth of net sales for 2021 is 8%, calculate the Quantum Inc. Additional Fund Needed (AFN) for 2021 based on the 2020 status quo. Also, please carefully explain the meaning of the projected 2021 AFN that you calculated.
AFN = (A*/S)(S) – (L*/S)(S) – M(S1)(1 – d) | Millions | |
A*:Assets required to support sales | $138,354.00 | |
L*: Spontaneously liabilities (8022 + 9290) | $17,312.00 | |
M: Profit margin | 14.29% | |
d: Payout ratio | 6.34% | |
S: Change in sales | $6,604.72 | |
S0: Sales | $82,559.00 | |
S1: Sales | $89,163.72 | |
AFN = 138,354/82,559 x 6604.72 – 17312 /82559 x 6604 – 14.29% x 89,163 x (6.34%\) | -$2,249.52 | Million |
A negative figure for additional funds needed means that there is a surplus of capital. |
Additional funds needed (AFN) is calculated as the excess of required increase in assets over the increase in liabilities and increase in retained earnings. |
Use this table to answer this question (All are stated in million dollars) Quantum Inc. Balance...
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