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The most recent financial statements for acme feed inc., follow. Sales for 2014 are projec

The most recent financial statements for acme feed inc., follow. Sales for 2014 are projec

The most recent financial statements for acme feed inc., follow. Sales for 2014 are projected to grow by 20 percent. Interest expense will remain constant; the tax rate and the dividend payout rate will also remain constant. Costs, other expenses, current assets, fixed assets, and accounts payable increase spontaneously with sales.

Total liabilities and owners’ equity

490,12

The firm is operating at full capacity and no new debt or equity is issued. Calculate the pro forma income statement and balance sheet for the company.

Pro Forma Income Statement

What external financing is needed to support the 20 percent growth rate in sales?

EFN=

 

  Sales

 

 

 

$

759,000

 

  Costs

 

 

 

 

594,000

 

  Other expenses

 

 

 

 

15,000

 

 

 

 

 

 

 

 

  Earnings before interest and taxes

 

 

 

$

150,000

 

  Interest paid

 

 

 

 

16,000

 

 

 

 

 

 

 

 

  Taxable income

 

 

 

$

134,000

 

  Taxes (30%)

 

 

 

 

40,200

 

 

 

 

 

 

 

 

  Net income

 

 

 

$

93,800

 

 

 

 

 

 

 

 

  Dividends

$

28,140

 

 

 

 

  Addition to retained earnings

 

65,660

 

 

 

 

 

             
Abhinav 02-Dec-2019

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