Homework Answers
| Calculation of pro-forma Income statement | ||||||||
| Proforma Income Statement | ||||||||
| 15% sales Growth | 20% sales Growth | 45% sales Growth | ||||||
| Sales | $870,550 | $908,400 | $1,097,650 | |||||
| Costs | $704,950 | $735,600 | $888,850 | |||||
| Other Expenses | $29,900 | $31,200 | $37,700 | |||||
| EBIT | $135,700 | $141,600 | $171,100 | |||||
| Interest Paid | $11,600 | $11,600 | $11,600 | |||||
| Taxable Income | $124,100 | $130,000 | $159,500 | |||||
| Taxes (24%) | $29,784 | $31,200 | $38,280 | |||||
| Net Income | $94,316 | $98,800 | $121,220 | |||||
| Dividends (50.38%) | $47,517 | $49,776 | $61,072 | |||||
| Add to RE | $46,799 | $49,024 | $60,148 | |||||
| Dividend payout ratio = Dividend / Net Income = $40740 / $80864 = 50.38% | ||||||||
| Calculation of EFN | ||||||||
| EFN i.e.external funds needed = Increase in assets - Increase in accounts payable - Increase in Retained earnings | ||||||||
| EFN = [2017 Total assets x Sales growth %] - [2017 Accounts Payable x Sales growth %] - Increase in retained earnings | ||||||||
| EFN at 15% sales growth = [$343,520 x 15%] - [$59000 x 15%] - $46,799 = -$4,121 | ||||||||
| EFN at 20% sales growth = [$343,520 x 20%] - [$59000 x 20%] - $49,024 = $7,880 | ||||||||
| EFN at 45% sales growth = [$343,520 x 45%] - [$59000 x 45%] - $60,148 = $67,886 | ||||||||
| 15% | 20% | 45% | ||||||
| EFN | -$4,121.00 | $7,880.00 | $67,886.00 | |||||
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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. Sales for 2018 are projected to grow...
The most recent financial statements for Crosby, Inc., follow.
Sales for 2018 are projected to grow by 20 percent. 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.
What is the EFN if the firm wishes to keep its debt-equity ratio
constant? (Do not round intermediate calculations and round
your answer to the nearest whole dollar amount, e.g.,...
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...
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. 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. 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. 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 remain constant Costs other expenses, current assets, fixed assets, and accounts payable increase spontaneously with sales. CROSBY, INC. 2017 Income Statement Sales $761,000 Costs 617,000 Other expenses 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. 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 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.
Sales for 2018 are projected to grow by 20 percent. 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.
What is the EFN if the firm wishes to keep its debt-equity ratio
constant? (Do not round intermediate calculations and round
your answer to the nearest whole dollar amount, e.g.,...
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. 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. 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. 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 remain constant Costs other expenses, current assets, fixed assets, and accounts payable increase spontaneously with sales. CROSBY, INC. 2017 Income Statement Sales $761,000 Costs 617,000 Other expenses 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. 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 Sales Costs Other expenses $754,000 610,000 24,500 Earnings before interest and taxes Interest paid $ 119,500 10,400 Taxable income...
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