Question
In: Finance
1. Consider the following simplified financial statements for Fire Dragon Corporation (assume no income taxes): Income...
1. Consider the following simplified financial statements for
Fire Dragon Corporation
(assume no income taxes):
Income Statement
Sales $32,000
Costs $24,400
Net Income $7,600
Balance Sheet
Assets $25,300
Total $25,300
Debt $5,800
Equity $19,500
Total $25,300
The company has forecast a sales increase of 15 percent. Fire
Dragon has also predicted that every item
on the balance sheet will increase by 15 percent. Create the pro
forma statements and reconcile them.
What is the plug variable here?
2. Now let’s assume that Fire Dragon pays out half of net income in
the form of a cash dividend. Also, costs
and assets vary with sales, but debt and equity do not. Prepare the
pro forma statements and determine the
external financing needed. What is the plug variable here?
Solutions
kindly Thumps Up ?
jeff jeffy answered 1 year agoRelated Solutions
Consider the following simplified financial statements for the Fire Corporation (assuming no income taxes): Income Statement...
Consider the following simplified financial statements for the
Fire Corporation (assuming no income taxes):
Income Statement
Sales
$38318
Costs
$24483
Balance Sheet
Assets
$56924
Debt
$37803
Equity
?
The company has predicted a sales increase of 14 percent. It has
predicted that every item on the balance sheet will increase by 14
percent as well.
What is the pro forma net income?
Consider the following simplified financial statements for the Fire Corporation (assuming no income taxes): Income Statement...
Consider the following simplified financial statements for the
Fire Corporation (assuming no income taxes):
Income Statement
Sales
$38,804
Costs
$22,685
Balance Sheet
Assets
$54,048
Debt
$38,755
Equity
?
The company has predicted a sales increase of 15 percent. It has
predicted that every item on the balance sheet will increase by 15
percent as well.
How much dividends should be paid to reconcile the pro forma
balance sheet?
Consider the following simplified financial statements for the Phillips Corporation (assuming no income taxes): Income Statement...
Consider the following simplified financial statements for the
Phillips Corporation (assuming no income taxes):
Income Statement
Balance Sheet
Sales
$25,000
Assets
$10,000
Debt
$4,600
Costs
13,200
Equity
5,400
Net
income
$11,800
Total
$10,000
Total
$10,000
Phillips has
predicted a sales increase of 11 percent. It has predicted that
every item on the balance sheet will increase by 11 percent as
well.
Required:
Calculate the
dividend paid. (Do not round your intermediate
calculations.)
Consider the following simplified financial statements for the Phillips Corporation (assuming no income taxes): Income Statement...
Consider the following simplified financial statements for the
Phillips Corporation (assuming no income taxes):
Income Statement
Balance Sheet
Sales
$27,000
Assets
$10,800
Debt
$4,600
Costs
12,800
Equity
6,200
Net income
$14,200
Total
$10,800
Total
$10,800
Phillips has predicted a sales increase of 10 percent. It has
predicted that every item on the balance sheet will increase by 10
percent as well.
Required:
Calculate the dividend paid. (Do not round your
intermediate calculations.)
Multiple Choice
$15,000
$14,969
$14,975
$14,981
$23,740
Consider the following simplified financial statements for the Yoo Corporation (assuming no income taxes): Income Statement...
Consider the following simplified financial statements for the
Yoo Corporation (assuming no income taxes):
Income Statement
Balance Sheet
Sales
$
46,100
Assets
$
24,300
Debt
$
6,300
Costs
39,630
Equity
18,000
Net
income
$
6,470
Total
$
24,300
Total
$
24,300
The company has predicted a sales increase of 10 percent. Assume
Yoo pays out half of net income in the form of a cash dividend.
Costs and assets vary with sales, but debt and equity do not.
Prepare...
Consider the following simplified financial statements for the Wims Corporation (assuming no income taxes) Income Statement...
Consider the following simplified financial statements for the
Wims Corporation (assuming no income taxes)
Income Statement
Balance Sheet
Sales
$
45,700
Assets
$
21,900
Debt
$
5,900
Costs
40,100
Equity
16,000
Net income
$
5,600
Total
$
21,900
Total
$
21,900
The company has predicted a sales increase of 6 percent. Assume
the company pays out half of net income in the form of a cash
dividend. Costs and assets vary with sales, but debt and equity do
not.
Prepare...
Consider the following simplified financial statements for the Yoo Corporation (assuming no income taxes): Income Statement...
Consider the following simplified financial statements for the
Yoo Corporation (assuming no income taxes):
Income Statement
Balance Sheet
Sales
$
39,600
Assets
$
23,800
Debt
$
6,800
Costs
31,800
Equity
17,000
Net income
$
7,800
Total
$
23,800
Total
$
23,800
The company has predicted a sales increase of 20 percent. Assume
Yoo pays out half of net income in the form of a cash dividend.
Costs and assets vary with sales, but debt and equity do not.
Prepare...
Here are simplified financial statements for Phone Corporation in a recent year: INCOME STATEMENT (Figures in...
Here are simplified financial statements for Phone Corporation
in a recent year:
INCOME
STATEMENT
(Figures in $
millions)
Net sales
$
12,700
Cost of goods sold
3,810
Other expenses
4,112
Depreciation
2,368
Earnings before interest and taxes (EBIT)
$
2,410
Interest expense
660
Income before tax
$
1,750
Taxes (at 30%)
525
Net income
$
1,225
Dividends
$
826
BALANCE SHEET
(Figures in $ millions)
End of Year
Start of Year
Assets
Cash and marketable securities
$
84
$...
Here are simplified financial statements for Phone Corporation in a recent year: INCOME STATEMENT (Figures in...
Here are simplified financial statements for Phone Corporation
in a recent year:
INCOME
STATEMENT
(Figures in $
millions)
Net sales
$
13,900
Cost of goods sold
4,460
Other expenses
4,197
Depreciation
2,758
Earnings before interest and taxes (EBIT)
$
2,485
Interest expense
725
Income before tax
$
1,760
Taxes (at 30%)
528
Net income
$
1,232
Dividends
$
936
BALANCE SHEET
(Figures in $ millions)
End of Year
Start of Year
Assets
Cash and marketable securities
$
97
$
166...
Here are simplified financial statements for Phone Corporation in a recent year: INCOME STATEMENT (Figures in...
Here are simplified financial statements for Phone Corporation
in a recent year: INCOME STATEMENT (Figures in $ millions) Net
sales $ 13,000 Cost of goods sold 3,960 Other expenses 4,037
Depreciation 2,458 Earnings before interest and taxes (EBIT) $
2,545 Interest expense 675 Income before tax $ 1,870 Taxes (at 30%)
561 Net income $ 1,309 Dividends $ 856 BALANCE SHEET (Figures in $
millions) End of Year Start of Year Assets Cash and marketable
securities $ 87 $ 156...
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