Prepare a projected income statement

Reference no: EM13208174

a. Use the following ratios to prepare a projected income statement, balance sheet, and statement of cash flows for year 3.

Sales growth......................................................................................................... 1.02%

Gross profit margin......................................................................................... 69.92%

Selling, general, and administrative expense/Sales.................... 39.28%

Depreciation expense/Prior-year PPE gross.................................. 12.14

Interest expense/Prior-year long-term debt.................................. 5.45%

Income tax expense/Pretax income..................................................... 29.88%

Accounts receivable turnover................................................................... 10.68

Inventory turnover.......................................................................................... 5.73

Accounts payable turnover........................................................................ 1.64

Taxes payable/Tax expense...................................................................... 50.33%

Total assets/Stockholders' equity (financial leverage)............ 2.06

Dividends per share........................................................................................ $1.37

Capital expenditure/Sales........................................................................... 5.91%

b. Based on your initial projections, how much external financing (long-term debt and/or stockholders' equity) will Coca-Cola need to fund its growth at projected increases in sales?

Refer to the financial statements of Campbell Soup Company

a. Compute the following liquidity measures for Year 10:

1. Current ratio

2. Acid-test ratio

3. Accounts receivable turnover (AR balance at end of Year 9 is $564.1.)

4. Inventory turnover (inventory balance at end of Year 9 is $816.0).

5. Days' sales in receivables

6. Days' sales in inventory

7. Conversion period (operating cycle).

8. Cash and cash equivalents to current assets.

9. Cash and cash equivalents to current liabilities.

10. Days' purchases in accounts payable.

11. Net trade cycle.

12. Cash flow ratio

b. Assess Campbell's liquidity position using results from (a).

c. For Year 10, compute ratios 1, 4, 5, 6, and 7 using inventories valued on a FIFO basis (FIFO inventory at the end of Year 9 is $904).

d. What are the limitations of the current ratio as a measure of liquidity?

e. How can analysis and use of other related measures (other than the current ratio) enhance the evaluation of liquidity?

Reference no: EM13208174

Questions Cloud

Determine the future value at the end of year : assume that $500 is deposited today, two years from now, four years from now, six years from now, and eight years from now. At a 10% interest rate compounded annually, determine the future value at the end of year 9.

Find out the mass of acetamide present per kg of water : Determine the mass of acetamide present per kg of water if the freezing point of this solution is 0 °C. (The freezing point of pure water is 0°C (exactly) at 1 atm pressure and the molal freezing-point-depression constant for water is 1.86°C/m.)

What is the market demand function for total : a) What is the market demand function for total X (= X1+X2) as a function of PX; I1; I2; and PY. b) Graph the two individual demand curves (with X on the horizontal axis, PX on the vertical axis) for the case I1 = 1000, I2 = 1000; and PY = 10.

Explain advantageous to relux the reaction mixture : In the dehydration of methylcyclohexanols, would it be advantageous to relux the reaction mixture instead of performing a distillation?

Prepare a projected income statement : Prepare a projected income statement, balance sheet, and statement of cash flows and what are the limitations of the current ratio as a measure of liquidity?

Determine the lump sum amount to pay back : a graduated payment plan with the first payment set at 1500 at year 1 and a gradient of $600 afterward, plus a remaining lump sum at end of year 5. determine the lump sum amount so that the pay back is completed in full, considering the interest r..

State firefly luciferase is the enzyme that allows fireflies : Firefly luciferase is the enzyme that allows fireflies to illuminate their abdomens. Because this light generation is an ATP-requiring reaction, firefly luciferase can be used to test for the presence of ATP.

How would the quantity demanded of each type of housing : A local realtor estimated the long-term income elasticity of demand for rental properties to be 0.9 and the long-run income elasticity for owner-occupied housing to be 1.10. Recent estimates indicate that income is forecast to rise at 5% per year ..

Explain what is the work done by the gas : Helium gas at 104.0 kPa and 372.0 K is located within a cylinder with a piston. Initially the gas occupies 0.3000 m3. While a constant force, F, is applied to the end of the piston so that the pressure inside the cylinder is held constant at 104.0..

User Account

All Pages