Raghubhai Problem 4-28 (Algo) Percent-of-sales method [LO4-3]The Manning Company has financial statements as shown next, which are representative of the company's historical average. The firmis expecting a 35 percent increase in sales next year, and management is concerned about the company's need for external funds.The increase in sales is expected to be carried out without any expansion of fixed assets, but rather through more efficient assetutilization in the existing store. Among liabilities, only current liabilities vary directly with sales.SalesExpensesEarnings before interest and taxesInterestEarnings before taxesTaxesEarnings after taxesDividendsIncome StatementCashAccounts receivableInventoryCurrent assetsFixed assetsTotal assetsThe firmAssetshas$ 260,000206,000$ 54,0008,700$ 45,30016,700$ 28,600$ 8,580Balance Sheet (in $ millions)$ 104,00097,000$5,000 Accounts payable39,000 Accrued wages60,000Accrued taxesLiabilities and Stockholders' Equity$ 201,000Using the percent-of-sales method, determine whether the co pany has external financing needs, or a surplus of funds. (Hint: A profitmargin and payout ratio must be found from the income statement.)Note: Do not round intermediate calculations. Input your answer as positive a value.Current liabilitiesNotes payable.Long-term debtCommon stockRetained earningsTotal liabilities and stockholders' equityin surplus funds.$ 24,6002,0504,550$ 31,2008,70023,500121,00016,600$ 201,000

To maintain growth of sales company need to increase assets and liabilities of the company that may…

e Manning Company has financial statements as shown next, which are representative of the company's historical ave expecting a 35 percent increase in sales next year, and management is concerned about the company's need for exte e increase in sales is expected to be carried out without any expansion of fixed assets, but rather through more efficie ization in the existing store. Among liabilities, only current liabilities vary directly with sales. Income Statement ales xpenses arnings before interest and taxes nterest arnings before taxes axec $ 260,000 206,000 $ 54,000 8,700 $ 45,300 16 700

e Manning Company has financial statements as shown next, which are representative of the company's historical ave expecting a 35 percent increase in sales next year, and management is concerned about the company's need for exte e increase in sales is expected to be carried out without any expansion of fixed assets, but rather through more efficie ization in the existing store. Among liabilities, only current liabilities vary directly with sales. Income Statement ales xpenses arnings before interest and taxes nterest arnings before taxes axec $ 260,000 206,000 $ 54,000 8,700 $ 45,300 16 700

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter12: Corporate Valuation And Financial Planning

Section: Chapter Questions

Problem 12SP

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S Problem 4-28 (Algo) Percent-of-sales method [LO4-3] The Manning Company has financial statements as shown next, which are representative of the company's historical average. The firm is expecting a 35 percent increase in sales next year, and management is concerned about the company's need for external funds. The increase in sales is expected to be carried out without any expansion of fixed assets, but rather through more efficient asset utilization in the existing store. Among liabilities, only current liabilities vary directly with sales. Sales Expenses Earnings before interest and taxes Interest Earnings before taxes Taxes Earnings after taxes Dividends Fixed assets Income Statement Cash Accounts receivable Inventory Current assets Total assets The firm Assets needs $ 220,000 171,200 $ 48,800 8,300 $ 40,500 16,300 $ 24,200 $ 7,260 Balance Sheet (in $ millions) $ 110,000 93,000 $8,000 Accounts payable 33,000 Accrued wages 69,000 Accrued taxes Liabilities and Stockholders' Equity…
17 The Manning Company has financial statements as shown next, which are representative of the company's historical average. The firm is expecting a 35 percent increase in sales next year, and management is concerned about the company's need for external funds. The increase in sales is expected to be carried out without any expansion of fixed assets, but rather through more efficient asset utilization in the existing store. Among liabilities, only current liabilities vary directly with sales. Sales Expenses Earnings before interest and taxes Interest Earnings before taxes Taxes Earnings after taxes Dividends. Income Statement: Cash Accounts receivable. Inventory Fixed assets Assets Current assets Total assets The firm $230,000 168,500 $ 61,500 9,500 $ 52,000 17,500 $ 34,500 $ 13,800 Balance Sheet Liabilities and Stockholders' Equity $6,500 42,000 Accrued wages 55,000 Accrued taxes $ 103,500 90,000 Accounts payable Current liabilities Notes payable Long-term debt Common stock Retained…
Problem 4-28 (Algo) Percent-of-sales method [LO4-3] The Manning Company has financial statements as shown next, which are representative of the company's historical average. The firm is expecting a 30 percent increase in sales next year, and management is concerned about the company's need for external funds. The increase in sales is expected to be carried out without any expansion of fixed assets, but rather through more efficient asset utilization in the existing store. Among liabilities, only current liabilities vary directly with sales. Sales Expenses Earnings before interest and taxes Interest Earnings before taxes Taxes Earnings after taxes Dividends Income Statement Fixed assets Cash Accounts receivable Inventory Current assets Total assets Assets The firm $ 250,000 184,800 $ 65,200 8,600 $ 56,600 16,600 $ 40,000 $ 16,000 Balance Sheet (in $ millions) $ 125,000 96,000 Liabilities and Stockholders' Equity $4,000 Accounts payable 53,000 Accrued wages 68,000 Accrued taxes Current…
Problem 4-27 (Algo) Percent-of-sales method [LO4-3] Owen's Electronics has nine operating plants in seven southwestern states. Sales for last year were $100 million, and the balance sheet at year-end is similar in percentage of sales to that of previous years (and this will continue in the future). All assets (including fixed assets) and current liabilities will vary directly with sales. The firm is working at full capacity. Cash Accounts receivable Inventory Current assets Fixed assets Assets Total assets New funds $ Balance Sheet (in $ millions) 18 $10 22 27 $59 47 Liabilities and Stockholders' Equity Accounts payable Accrued wages Accrued taxes Current liabilities $106 Owen's Electronics has an aftertax profit margin of 8 percent and a dividend payout ratio of 50 percent. If sales grow by 25 percent next year, determine how many dollars of new funds are needed to finance the growth. Note: Do not round intermediate calculations. Enter your answer in dollars, not millions, (e.g.,…
The Manning Company has financial statements as shown next, which are representative of the company's historical average. The firm is expecting a 30 percent increase in sales next year, and management is concerned about the company's need for external funds. The increase in sales is expected to be carried out without any expansion of fixed assets, but rather through more efficient asset utilization in the existing store. Among liabilities, only current liabilities vary directly with sales. Income Statement Sales $220,000 158,000 $ 62,000 9,400 $ 52,600 17,400 $ 35,200 Expenses Earnings before interest and taxes Interest Earnings before taxes Тахes Earnings after taxes Dividends $ 8,800 Balance Sheet Assets Liabilities and Stockholders' Equity $ 5,000 61,000 Accrued wages 77,000 Accrued taxes Cash $ Accounts payable $ 25,700 Accounts receivable 2,400 4,900 $ 33,000 9,400 Inventory $143,000 89,000 Notes payable Current assets Current liabilities Fixed assets Long-term debt Common stock…
Problem 4-27 (Algo) Percent-of-sales method [LO4-3] Owen's Electronics has nine operating plants in seven southwestern states. Sales for last year were $100 million, and the balance sheet at year-end is similar in percentage of sales to that of previous years (and this will continue in the future). All assets (including fixed assets) and current liabilities will vary directly with sales. The firm is working at full capacity. Cash Accounts receivable. Inventory Current assets Assets Fixed assets Balance Sheet (in 5 millions). Liabilities and Stockholders' Equity $5 Accounts payablet 23 26 $ 54 43 Accrued wages Accrued taxes. Current liabilities Notes payable Common stock Retained earnings. $97 Total liabilities and stockholders equity Answer is complete but not entirely correct. New funds 21 $18 5 11 $34 13 18 32 $ 97 Total assets Owen's Electronics has an aftertax profit margin of 8 percent and a dividend payout ratio of 30 percent. If sales grow by 15 percent next year, determine how…
Problem 4-27 (Algo) Percent-of-sales method [LO4-3] Owen's Electronics has nine operating plants in seven southwestern states. Sales for last year were $100 million, and the balance sheet at year-end is similar in percentage of sales to that of previous years (and this will continue in the future). All assets (including fixed assets) and current liabilities will vary directly with sales. The firm is working at full capacity. Cash Accounts receivable Inventory Current assets. Fixed assets Total assets Assets New funds at I can't message you ahead of time because of 1 Balance Sheet (in $ millions) 2 $ 11 28 29 $ 68 46 OCT $ 114 Liabilities and Stockholders' Equity Accounts payable Accrued wages Accrued taxes Owen's Electronics has an aftertax profit margin of 10 percent and a dividend payout ratio of 50 percent. If sales grow by 30 percent next year, determine how many dollars of new funds are needed to finance the growth. Note: Do not round intermediate calculations. Enter your answer…
The Manning Company has financial statements as shown next, which are representative of the company’s historical average. The firm is expecting a 30 percent increase in sales next year, and management is concerned about the company’s need for external funds. The increase in sales is expected to be carried out without any expansion of fixed assets, but rather through more efficient asset utilization in the existing store. Among liabilities, only current liabilities vary directly with sales. Income Statement Sales $ 200,000 Expenses 149,600 Earnings before interest and taxes $ 50,400 Interest 9,200 Earnings before taxes $ 41,200 Taxes 17,200 Earnings after taxes $ 24,000 Dividends $ 6,000 Balance Sheet Assets Liabilities and Stockholders' Equity Cash $ 6,000 Accounts payable $ 22,900 Accounts receivable 55,000 Accrued wages 2,300 Inventory 69,000 Accrued taxes 4,800 Current assets $ 130,000 Current liabilities $ 30,000 Fixed…
[EXCEL] Payback: Northern Specialties just purchased inventory-management computer software at a cost of $1,645,276. Cost savings from the investment over the next six years will produce the following cash flow stream: $212,455, $292,333, $387,479, $516,345, $645,766, and $618,325. What is the payback period on this investment? please use excel
which one is correct please confirm? QUESTION 35 CU Tech expects sales next year will be $4.8 million, a 25% increase over current sales. CU has total assets of $2.24 million, and all assets will increase proportionately with sales. CU has $1.49 million in current liabilities and a current ratio of 1.60 to 1. What total financing will CU need to support the expected sales increase? a. $234,400 b. No financing needed, surplus of $139,700 c. $48,800 d. $187,500
AFN Equation Refer to Problem 9-1. What would be the additional funds needed if the companys year-end 2018 assets had been 7 million? Assume that all other numbers, including sales, are the same as in Problem 9-1 and that the company is operating at full capacity. Why is this AFN different from the one you found in Problem 9-1? Is the companys capital intensity ratio the same or different?
2.[EXCEL] Cash conversion cycle: Northern Manufacturing Company management found that during the last year it took an average of 47 days to pay its suppliers, whereas it took 63 days to collect its receivables. The company's days' sales in inventory was 49 days. What was Northern's cash conversion cycle?