How large a sales increase can the company achieve

Assignment Help Finance Basics

Reference no: EM13287540

Bannister Legal Services generated $2.0 million in sales during 2009, and its year-end total assets were $ million. Also, at the year-end 2009, current liabilities were $500,000, consisting of $200,000 of notes payable, $200,000 of accounts payable, and $100,000 of accruals. Looking ahead to 2010, the company estimates that its assets must increase by 75 cents for every $1 increase in sales. Bannister's profit margin is 5% and its payout ratio is 60%. How large a sales increase can the company achieve without having to raise funds externally?

Reference no: EM13287540

Questions Cloud

What coupon rate should the company set on its bonds : If a company would like to issue some semiannual coupon bonds at par. Comparable bonds have a current yield of 8.16 percent, an effective annual yield of 8.68 percent, and a yield to maturity of 8.50 percent. What coupon rate should the company se..

Explain the relevance of your answer in terms of firm value : Assuming that the ROIC is expected to remain constant in Year 3 and beyond, what is the Year 0 value of operations, in millions? Note that, you must first find the horizon, or terminal, value.

Explain how many grams of product will form : 20.0 mL of 0.250 M calcium nitrate are mixed with 25.0 mL of 0.150 M potassium nitrate. How many grams of product will form

What is the diameter of the needle : You find an unlabeled box of fine needles, and want to determine how thick they are. A standard ruler won't do the job, What is the diameter of the needle

How large a sales increase can the company achieve : Bannister's profit margin is 5% and its payout ratio is 60%. How large a sales increase can the company achieve without having to raise funds externally?

What is his displacement on the walk home : The school bus picks up Brian in front of his house and takes him on a straight-line 3.6 km bus ride to school in the positive direction. what is his displacement on the walk home

Express the voting logic function in a truth table : A minority voting circuit makes a decision based on the minority of votes. The logic receives THREE inputs x, y, and z.Together, these input variables are the binary representation ofthe number of members who vote "yes" out of 7 total members.

Which the firm investment bankers have recommended : Data for use in the forecast are shown below. However, the CEO is concerned about the impact of a change in the payout ratio from the 10% that was used in the past to 50%, which the firm's investment bankers have recommended.

Explain a saturated solution of calcium fluoride : Consider a saturated solution of calcium fluoride in 0.039 M potassium nitrate. Complete the following tasks, and then answer the question.

User Account

All Pages