Question

Dahlia Colby, CFO of Charming Florist Ltd., has created the firm’s pro forma balance sheet for the next fiscal year. Sales are projected to grow by 20 percent to $420 million. Current assets, fixed assets, and short-term debt are 25 percent, 70 percent, and 15 percent of sales, respectively. Charming Florist pays out 25 percent of its net income in dividends. The company currently has $128 million of long-term debt and $56 million in common stock par value. The profit margin is 16 percent.

  

a.

Prepare the current balance sheet for the firm using the projected sales figure. (Be sure to list the assets and liabilities in order of their liquidity. Enter your answers in dollars, not millions of dollars, e.g., 1,234,567. Do not round intermediate calculations and round your answers to the nearest whole number, e.g., 32.)

  

Balance Sheet
Assets			Liabilities and equity
(Click to select)Accounts receivableFixed assetsShort-term debtCommon stockLong-term debtCurrent assets	$		(Click to select)Current assetsAccumulated retained earningsAccounts payableShort-term debtCommon stockLong-term debt	$
(Click to select)Short-term debtLong-term debtCommon stockFixed assetsCurrent assetsAccounts receivable			(Click to select)Accumulated retained earningsCurrent assetsAccounts payableCommon stockShort-term debtLong-term debt
			(Click to select)Accumulated retained earningsCurrent assetsAccounts payableLong-term debtCommon stockShort-term debt	$
			(Click to select)Accumulated retained earningsAccounts payableShort-term debtCurrent assetsLong-term debtCommon stock
			Total equity	$
Total assets	$		Total liabilities and equity	$

  

b.

Based on Ms. Colby’s sales growth forecast, how much does Charming Florist need in external funds for the upcoming fiscal year? (Enter your answer in dollars, not millions of dollars, e.g., 1,234,567. Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)

  

External financing needed

$

  

c-1.

Prepare the firm’s pro forma balance sheet for the next fiscal year. (Be sure to list the assets and liabilities in order of their liquidity. Enter your answers in dollars, not millions of dollars, e.g., 1,234,567. Do not round intermediate calculations and round your answers to the nearest whole number, e.g., 32.)

  

Balance Sheet
Assets			Liabilities and equity
(Click to select)Long-term debtFixed assetsAccumulated retained earningsAccounts receivableShort-term debtCurrent assets	$		(Click to select)Accumulated retained earningsLong-term debtCommon stockShort-term debtCurrent assetsAccounts payable	$
(Click to select)Current assetsLong-term debtAccumulated retained earningsShort-term debtAccounts receivableFixed assets			(Click to select)Current assetsAccumulated retained earningsCommon stockAccounts payableShort-term debtLong-term debt
			(Click to select)Current assetsAccounts payableShort-term debtCommon stockAccumulated retained earningsLong-term debt	$
			(Click to select)Accounts payableLong-term debtShort-term debtCommon stockCurrent assetsAccumulated retained earnings
			Total equity	$
Total assets	$		Total liabilities and equity	$

  

c-2.	Calculate the external funds needed. (Enter your answer in dollars, not millions of dollars, e.g., 1,234,567. Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)

  

External financing needed

$

Answer 1