In: Finance
Upton's balance sheet as of December 31, 2019, is shown here (millions of dollars):
Cash |
$ 3.5 |
Accounts payable |
$ 9.0 |
|
Receivables |
26.0 |
Notes payable |
18.0 |
|
Inventories |
58.0 |
Line of credit |
0 |
|
Total current assets |
$ 87.5 |
Accruals |
8.5 |
|
Net fixed assets |
35.0 |
Total current liabilities |
$ 35.5 |
|
Mortgage loan |
6.0 |
|||
Common stock |
15.0 |
|||
Retained earnings |
66.0 |
|||
Total assets |
$122.5 |
Total liabilities and equity |
$122.5 |
|
Sales for 2019 were $475 million and net income for the year was $14.25 million, so the firm's profit margin was 3.0%. Upton paid dividends of $5.7 million to common stockholders, so its payout ratio was 40%. Its tax rate was 25%, and it operated at full capacity. Assume that all assets/sales ratios, (spontaneous liabilities)/sales ratios, the profit margin, and the payout ratio remain constant in 2020.
Upton Computers |
||
Cash |
$ |
|
Receivables |
$ |
|
Inventories |
$ |
|
Total current assets |
$ |
|
Net fixed assets |
$ |
|
Total assets |
$ |
|
Accounts payable |
$ |
|
Notes payable |
$ |
|
Line of credit |
$ |
|
Accruals |
$ |
|
Total current liabilities |
$ |
|
Mortgage loan |
$ |
|
Common stock |
$ |
|
Retained earnings |
$ |
|
Total liabilities and equity |
$ |