2. The following data items represent the forecast for CSTC Corp. for 2016: CSTC

Question

2. The following data items represent the forecast for CSTC Corp. for 2016: CSTC. Corp 2,016 633,500,000 2016 Sales 2016 Net Profit Margin 2016 Dividends Last year's (2015) Retained Earnings 185,000,000 2016 Total Assets 2016 Long Term Debt 2016 Common Stock 215% 540,000,000 231,000,000 100,000,000 (10 points) Using this data, complete the proforma financial statements below (next page) by filling in the appropriate (light blue) blanks. You do not need the other (dark grey) blanks. a. (10 points) What is the firm's estimated Additional Funds Needed (AFN) for 2016? Discuss what does this result means to the firm, and how management would use it. b.

Explanation / Answer

a) Proforma Income Statement for year 2016

Sales

   Proforma Balance Sheet for year 2016

Total Liabilities

Long-term debt

Common Stock

Retained earnings (185000000 + 13620250)

Current Liabilities (540000000 - 231000000 - 100000000 - 198620250)

231000000

100000000

198620250

10379750

b) The firm's estimated additional funds needed = 540000000 - 231000000 - 10000000 = $ 209000000.

Additional funds needed is the money raised by an organization from the external sources (such as loans, issue of debentures etc.)

Sales

633500000 EAT (Earnings after tax) = 633500000 * 2.15 % 13620250 Dividend NIL

Related Questions

Navigate

• Browse (All)
• Browse 2
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.