What is the external financing need if the current sales

Assignment Help Financial Management

Reference no: EM131826500

1. A firm has total assets of $260,000, long-term debt of $90,000, stockholders' equity of $120,000, and current liabilities of $50,000. The dividend payout ratio is 40 percent and the profit margin is 7 percent. Assume all assets and current liabilities change spontaneously with sales and the firm is currently operating at full capacity. What is the external financing need if the current sales of $300,000 are projected to increase by 10 percent?

$7,140

$14,210

$8,495

$13,200

$4,280

2. The CFO of Organic Foodstuff Ltd., has created the firm s pro forma balance sheet for the next fiscal year. Sales are projected to grow by 10 percent to $400 million. Current assets, fixed assets, and short-term debt are 20 percent, 75 percent, and 15 percent of sales, respectively. Organic Foodstuff pays out 30 percent of its net income in dividends. The company currently has $105 million of long-term debt and $46 million in common stock par value. The profit margin is 9 percent. Based on the CFO s sales growth forecast, how much does Organic Foodstuff need in external funds for the upcoming fiscal year? (Hint: you need to construct the balance sheet this year and determine the accumulated retained earnings before constructing the proforma balance sheets to determine the EFN)

$3,612,767

$3,890,909

$4,102,360

$4,210,880

$4,420,807

Reference no: EM131826500

Questions Cloud

What is your expected price when you sell the bond : You own a zero-coupon bond with a face value of $1000 and five years until maturity. What is your expected price when you sell the bond?

Compares and contrasts leadership and management : Compares and contrasts leadership and management. Identifies the traits and characteristics of effective leaders and efficient managers.

How relevant are these theories to today management practice : Read the three articles and answer the question below in three pages. Based on the literature, how relevant are these theories to today's management practices

Explain the expectations about the message : Consider a time when the way a message was delivered to you made a difference. What were your expectations about the message.

What is the external financing need if the current sales : What is the external financing need if the current sales of $300,000 are projected to increase by 10 percent?

What was the trading price : The equity REIT A currently (current time is end of 2005) trades at $120/share. What was the trading price of A at the beginning of 2005?

Where does the follower fall on development level continuum : Where does the follower fall on the development level continuum (D1 to D4)? Based on this, which leadership style is most appropriate (S1 to S4)?

Define business ethics and ethical reasoning : Think back to a time when you had a supervisor or coworker who you believe made an unethical decision or exhibited unethical behavior.

Compare your assessment with your results : Compare your assessment with your results on the Style Questionnaire at the end of chapter 4. Will your current leadership style(s) address this situation?

User Account

All Pages