Polished Marketing. is forecasting that next year’s sales of Happy-Time Vitamins will decline from $122 million...

Polished Marketing. is forecasting that next year’s sales of Happy-Time Vitamins will decline from $122 million to $106 million. Polished Marketing estimates that cash requirements will be 1% of sales, inventory will be 10% of sales, receivables will be 7% of sales, and payables will be 8% of sales. Depreciation is expected to be 8% of sales, and the tax rate is 35%. How will next year’s net working capital requirement be affected?

Solutions

Expert Solution

jeff jeffy answered 1 year ago

Next > < Previous

Related Solutions

Aldi is forecasting next year’s turnover at USD 70 million. The firm is planning to maintain a 47%

Aldi is forecasting next year’s turnover at USD 70 million. The firm is planning to maintain a 47% dividend pay-out ratio and is expecting a profit margin of 15%. Calculate the projected rise in retained earnings and explain the company’s three main options for raising new growth funding.

(Financial forecasting—percent of sales) Next year's sales for Cumberland Mfg. are expected to be $16.10 million....

(Financial forecasting—percent of sales) Next year's sales for Cumberland Mfg. are expected to be $16.10 million. Current sales are $14 million, based on current assets of $4.67 million and fixed assets of $7.00 million. The firm's net profit margin is 3 percent after taxes. Cumberland estimates that its current assets will rise in direct proportion to the increase in sales, but that its fixed assets will increase by only $200,000. Currently, Cumberland has $1.50 million in accounts payable (which vary...

(Financial forecasting—percent of sales) Next year's sales for Cumberland Mfg. are expected to be $18.75 million....

(Financial forecasting—percent of sales) Next year's sales for Cumberland Mfg. are expected to be $18.75 million. Current sales are $15 million, based on current assets of $5.00 million and fixed assets of $7.50 million. The firm's net profit margin is 5 percent after taxes. Cumberland estimates that its current assets will rise in direct proportion to the increase in sales, but that its fixed assets will increase by only $200,000. Currently, Cumberland has $1.50 million in accounts payable (which vary...

(Financial forecasting—percent of sales) Next year's sales for Cumberland Mfg. are expected to be $21.60 million....

(Financial forecasting—percent of sales) Next year's sales for Cumberland Mfg. are expected to be $21.60 million. Current sales are $18 million, based on current assets of $6.00 million and fixed assets of $9.00 million. The firm's net profit margin is 5 percent after taxes. Cumberland estimates that its current assets will rise in direct proportion to the increase in sales, but that its fixed assets will increase by only $200,000. Currently, Cumberland has $1.50 million in accounts payable (which vary...

Financial forecasting-% of sales) Tulley Appliances Inc. projects next year's sales to be $19.6 million. Current...

Financial forecasting-% of sales) Tulley Appliances Inc. projects next year's sales to be $19.6 million. Current sales are $15.4 million, based on current assets of $5.1 million and fixed assets of $5.2 million. The firm's net profit margin is 4.9% after taxes. Tulley forecasts that its current assets will rise in direct proportion to the increase in sales, but that its fixed assets will increase by only $109,000. Currently, Tulley has $1.5 million in acct. payable (which vary directly with...

You’ve been asked to use the following historical sales information to forecast next year’s sales for...

You’ve been asked to use the following historical sales information to forecast next year’s sales for Worldwide Widget Manufacturing, Inc. The actual sales for 2016 were $1,950,000. Year Sales 2011 $1,750,000 2012 $2,000,000 2013 $1,350,000 2014 $2,250,000 2015 $1,800,000 What would be the next year's forecast according to the naïve approach and the average sales approach? What would be the MAPE according to the naïve approach and the average sales approach? Kindly show all detailed calculations.

(Financial forecasting long dash—percent of sales) Next year's sales for Cumberland Mfg. are expected to be...

(Financial forecasting long dash—percent of sales) Next year's sales for Cumberland Mfg. are expected to be $19.20 million. Current sales are $16 million, based on current assets of $5.33 million and fixed assets of $8.00 million. The firm's net profit margin is 44 percent after taxes. Cumberland estimates that its current assets will rise in direct proportion to the increase in sales, but that its fixed assets will increase by only $200,000. Currently, Cumberland has $1.50 million in accounts payable...

Next Year’s Sales Projections: Product Sales Price # of Units Handbags $400.00 10,000 Wallets $120.00 15,000...

Next Year’s Sales Projections: Product Sales Price # of Units Handbags $400.00 10,000 Wallets $120.00 15,000 Inventories: Product Beginning of Next Year End of Next Year Handbags 1,000 1,500 Wallets 1,500 500 Direct Materials: Direct Material Handbag Wallet Leather 3 feet 1 foot Zipper 3 zippers 1 zipper Embellishments 20 5 Direct Material Costs: Purchase Price Inventory – Beg Inventory - End Leather $40.00 foot 100 feet 50 feet Zipper $10 zipper 20 zippers 20 zippers Embellishments $5 30 20...

The Wei Corporation expects next year’s net income to be $15 million. The firm’s debt ratio...

The Wei Corporation expects next year’s net income to be $15 million. The firm’s debt ratio is currently 40%. Wei has $12 million of profitable investment opportunities, and it wishes to maintain its existing debt ratio. According to the residual distribution model (assuming all payments are in the form of dividends), how large should Wei’s dividend payout ratio be next year? (10 points)

The firm Lando expects cash flows in one year’s time of $90 million if the economy...

The firm Lando expects cash flows in one year’s time of $90 million if the economy is in a good state or $40 million if it is in a bad state. Both states are equally likely. The firm also has debt with face value $65 million due in one year. Lando is considering a new project that would require an investment of $30 million today and would result in a cash flow in one year’s time of $47 million in...

Subjects