BTC has dales for the year ended December 31,2013 of $25.00 million. The firm fo
ID: 2760163 • Letter: B
Question
BTC has dales for the year ended December 31,2013 of $25.00 million. The firm follows a policy of paying all net earnings out to its common stockholders in cash dividends. Thus, BTC generates no funds from its earnings that can be used to expand its operations. (Assume that depreciation expense is just equal to the cost of replacing worn-out assets).
A-If BTC anticipates sales of $40 million during the coming yer, develop a pro forma balance sheet for the firm on December 31, 2014. Assume that current assets vary as a % of sales, net fixed assets remain unchanged, and accounts payable vary as a % of sales. Use notes payable as a balancing entry.
B-How much new financing with BTC need in 2014?
C-What limitations does the % of sales forecast method suffer from? SEE BELOW
BOYD TRUCKING COMPANY PROJECTED BALAND SHEE, DECEMBER 31, 2013 ($ MILLIONS)
Current Assets $10.00 Accounts Payable $5.00
Net Fixed Assets $15.00 Notes Payable $ 0
TOTAL $25.00 Bonds $10.00
i Common Equity $10.00
TOTAL $25.00
Explanation / Answer
Use this link to get answer
https://financeaccountsonlinetutoring-btccompanyanalysis.googledrives/
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.