Question

THE ROSE CORPORATION
Income Statement ($ ‘000)
Sales		$ 1,000
Costs		833
Taxable income		$   167
Taxes (21%)		35
Net income		$    132
Dividends		$       44
Addition to retained earnings		$       88

THE ROSE CORPORATION
Balance Sheet ($ ‘000)
Cash		160	Accounts payable		300
Accounts receivable		440	Notes payable		100
Inventory		$600	Total Current Liabilities:		$400
Total Current Assets:		$ 1,200	Long-term Debt:		$800
			Owners' equity
Fixed Assets			Common stock and
Net plant and equipment		$ 1,800	paid-in surplus		$ 800
			Retained earnings		1,000
			Total		$ 1,800
Total assets		$ 3,000	Total liabilities and equity		$ 3,000

How can I calculate the pro forma balance sheet? Assuming sales will grow 20%. Only Accounts Payable is tied to sales.

Answer 1