a. Assume that the dividend payout ratio is fixed at 50% and the equity-to-asset ratio is fixed at two-thirds. What is the internal growth rate for 2023? b. What is the sustainable growth rate for 2023?
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- The financial statements of Eagle Sport Supply are shown in the table below. For simplicity, "Costs" include interest. Assume that Eagle's assets are proportional to its sales. Assume a growth rate of 30% in revenue, expenses, and assets in 2023. The tax rate will remain constant. Income Statement Sales Costs $ 4,550 2,050 Pretax income Taxes (at 30.0%) $ 2,500 750 Net income $ 1,750 Balance Sheet, Year-End 2022 Net assets $ 6,600 2021 $ 6,300 Total $ 6,600 $ 6,300 Debt Equity Total 2022 $ 2,800 3,800 2021 $ 2,700 3,600 $ 6,600 $ 6,300 a. Assume that the dividend payout ratio is fixed at 60% and the equity-to-asset ratio is fixed at two-thirds. What is the internal growth rate for 2023? b. What is the sustainable growth rate for 2023? Note: For all requirements, do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. a. Internal growth rate b. Sustainable growth rate % %The financial statements of Eagle Sport Supply are shown in the table below. For simplicity, "Costs" include interest. Assume that Eagle's assets are proportional to its sales. Assume a growth rate of 30% in revenue, expenses, and assets in 2020. The tax rate will remain constant. Income Statement Sales Costs Pretax income Taxes (at 40.0%) Net income 2019 Net assets $5,400 Total $3,350 1,450 $1,900 760 $1,140 Balance Sheet, Year-End 2018 $5,100 $5,400 $5,100 2019 $2,200 3,200 Debt Equity Total $5,400 6.42 x % a. Assume that the dividend payout ratio is fixed at 50% and the equity-to-asset ratio is fixed. What is the internal growth rate for 2020? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) X Answer is complete but not entirely correct. Internal growth rate 2018 $2,100 3,000 $ 5,100 b. What is the sustainable growth rate for 2020? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal…The financial statements of Eagle Sport Supply are shown in the table below. For simplicity, "Costs" include interest. Assume that Eagle's assets are proportional to its sales. Assume a growth rate of 30% in revenue, expenses, and assets in 2020. The tax rate will remain constant. Income Statement Sales Costs Pretax income Taxes (at 40.0%) Net income Net assets Total 2019 $5,400 $5,400 Internal growth rate $3,350 1,450 $1,900 760 $1,140 Balance Sheet, 2018 $5,100 Sustainable growth rate $ 5,100 Year-End % Debt Equity Total a. Assume that the dividend payout ratio is fixed at 50% and the equity-to-asset ratio is fixed. What is the internal growth rate for 2020? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) 2019 $ 2,200 3,200 $5,400 2018 $ 2,100 3,000 $ 5,100 b. What is the sustainable growth rate for 2020? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) %
- Consider the following information that you propose to use to obtain an estimate of year 2004 EPS for the MacLog Company. Estimated Year 2019 Year 2020 GDP 11,000 Billion GDP growth 3.5% Sales per share $800 Operating profit margin 12% Depreciation/Fixed Assets 14% Fixed asset turnover 2 Interest rate 3.5% Total asset turnover 0.7 Debt/Total assets 45% Tax rate 36% In addition, a regression analysis indicates the following relationship between growth in sales per share for MacLog, and GDP growth is %Δ Sales per share = 0.015 + 0.75(%Δ GDP) Refer to Exhibit 9.6. Calculate the firm's level of Total Assets per share for the year 2020. a. $1,385.77 b. $1,113.58 c. $1,050.65 d. $1,065.67 e. $1,190.06Based on the following information, calculate the sustainable growth rate for Kaleb's Heavy Equipment: Profit margin Capital intensity ratio Debt-equity ratio Net income Dividends 8.1% .51 .67 $ 29,000 $19,720Global Corp. expects sales to grow by 7% next year. Using the percent of sales method and the data provided in the given tables LOADING... , forecast: a. Costs except depreciation b. Depreciation c. Net income d. Cash e. Accounts receivable f. Inventory g. Property, plant, and equipment h. Accounts payable (Note: Interest expense will not change with a change in sales. Tax rate is 26%.) The Tax Cuts and Jobs Act of 2017 temporarily allows 100% bonus depreciation (effectively expensing capital expenditures). However, we will still include depreciation forecasting in this chapter and in these problems in anticipation of the return of standard depreciation practices during your career. Income Statement Net Sales 185.3Costs Except Depreciation -175.4EBITDA 9.9Depreciation and Amortization -1.2EBIT 8.7Interest Income (expense) -7.7Pretax Income 1Taxes (26%) -0.3Net Income 0.7 Balance Sheet Assets Cash 23.4Accounts…
- You are given the following information on Kaleb's Heavy Equipment: Profit margin Capital intensity Debt-equity ratio Net income Dividends 18 $70,000 $ 15,200 Sustainable growth rate A Calculate the sustainable growth rate. (Do not round Intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)Using the AFN formula in financial forecasting approach, Determine the following for Piano Co. given the following accounting information assuming that the firm’s profit margin remains constant and the company is at full capacity. · Sales this year is P6,000,000· Percentage increase projected for next year sales = 20%· Net income this year amounts to P600,000· Retention ratio = 50%· Accounts payable = P1,100,000· Notes payable = P180,000· Accrued expenses = P500,000· Projected excess funds available next year is determined to be P200,000 Questions: 1. Determine the spontaneous liabilities increase. 2. How much is the increase in Retained Earnings? 3. How much is the total assets?Supposing that the 2022 sales are projected to increase by 25% over the year 2021 sales and that there is proportional relationship between sales to operating costs, interest expenses, current assets and spontaneous liabilities. The company has been operating at full capacity and planned to maintain the dividend ratio and profit margin position of the previous year.Required i. Using the Percentage of Sales proforma method, compute the additional funds needed (AFN), assuming that the company was operating at full capacity in the year 2021. ii. Using the Formula method, compute the additional funds needed, assuming that the company was operating at full capacity in the year 2021.
- You are given the following information on Kayla's Heavy Equipment: Profit margin Capital intensity ratio Debt-equity ratio 7.3% .95 1.05 %24 84,000 24 24,000 : Net income Dividends Calculate the sustainable growth rate. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g.., 32.16.) Sustainable growth rate ***** ** 23 %23 %23 %23 %23 %23 %23Loreto Inc. has the following financial ratios: asset turnover = 1.60; net profit margin (i.e., net income/sales) = 6%; payout ratio = 30%; equity/assets = 0.50. a. What is Loreto's sustainable growth rate? b. What is its internal growth rate? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) A. Sustainable growth rate _______% B. Internal growth rate ______%Ogier Incorporated currently has $800 million in sales, which are projected to grow by 10% in Year 1 and by 5% in Year 2. Its operating profitability ratio (OP) is 10%, and its capital requirement ratio (CR) is 80%? What are the projected sales in Years 1 and 2? What are the projected amounts of net operating profit after taxes (NOPAT) for Years 1 and 2? What are the projected amounts of total net operating capital (OpCap) for Years 1 and 2? What is the projected FCF for Year 2?
