9. Data from Taser\'s 2015 Income statement & balance sheet and 2016 sales forec
ID: 2656935 • Letter: 9
Question
9. Data from Taser's 2015 Income statement & balance sheet and 2016 sales forecast are below. Actual YE: 2015 Forecast: 2016 Sales Profit margin Dividend Payout $2,500 5% 40% Sales $3,750 Actual YE: 2015 Actual YE: 2015 Cash Acts Receivable Inventories Net Fixed Assets $100 200 200 750 Acts Payable Notes Payable Accruals LT Debt Common Stock Retained Earnings Total Liab & Equity$1,250 $50 150 50 400 100 500 Total Assets $1,250 Taser's fixed assets are at 100% capacity and current assets reflect desired levels for operations. Taser anticipates no change in its operating margin and dividend payout rate. Forecast the Financial Statements using a percentage of sales approach. What is Taser's need for external funds (EFN) in the coming year, 2016? EFN = $Explanation / Answer
1)Net Income = sales* Profit margin
= 3750 * .05
= 187.5
Addition to Retained earning after dividend = 187.5 [1-.40] = 112.5
2)% Increase in sales = [3750-2500]/2500 =.50 or 50%
Total asset desired for 2016 = 1250 [1+.5 ] = 1875
3)current liabilities for 2015 = 50+150+50=250
Current liabilities for 2016 = 250[1+.5 ]= 375
Total liabilities for 2016 = 375+ 400 = 775
4)Total asset = total liabilities +equity
1875 = 775 +equity
Equity = 1875-775 = 1100
Equity = common stock + retained earning +addition to Retained earning +EFN
1100 =100+500+ 112.5 +EFN
EFN = 1100-100-500-112.5
= 387.5
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