Question

In: Finance

Forecast the balance sheet for Lambert Co. using the following projected information ($000). Round all projections...

Forecast the balance sheet for Lambert Co. using the following projected information ($000). Round all projections to the nearest thousand dollars.

Sales $10000
Cash $500
Accruals $50
Gross Margin 45%
Inventory Turns (based on COGS) 7.0
Total Asset Turnover 1.25
Current Ratio 2.0
Debt: Equity 1:3
ACP 42 days
Assets Liabilities
Cash ? A/P ?
A/R ? Accruals ?
Inventory ? C/L ?
C/A ? Debt ?
Net F/A ? Equity ?
Total Assets ? Total L&E ?

Solutions

Expert Solution

Assets Amt in 000 Liabilities Amt in 000
Cash                               500 A/P-note 8                1,168
A/R - note 2                            1,151 Accruals                     50
Inventory -note 3                               786 C/L-note 7                1,218
C/A -note 4                            2,436 Debt - note 9                1,695
Net F/A -note 5                            5,564 Equity - note 9                5,086
Total Assets - note 1                            8,000 Total L&E -note 6                8,000
Note -1 Total asset = sales/asset = 1.25
Asset = 10000/1.25 $8,000
Note 2 AR = ACP*sales/365                            1,151
=42*10000/365
Note 3 Inventory turnover = Cost of good sold/inventory = 7
=(10000*0.55)/inventory = 7
inventory = 10000*0.55/7                                      786
Note 4 C/A = Cash+AR + inventory                                   2,436
Note 5 Net fixed asset = Total asset - Current asset                                   5,564
=8000-2436
Note 6 Total L&E = Total Asset = 8000
Note 7 Current ratio = 2 = Current asset / Current liablities
Current liabilities = Current asset / 2 = 2436/2                                   1,218
Note 8 Account payable = Current liablities - Accruals = 1218-50                                   1,168
Note 9 Total debt and equity = Total L&E - Current liablities = 8000-1218                                   6,782
Debt/equity ratio = 1:3
Debt = 6832/4                                   1,695
Equity = 6832*3/4                                   5,086

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