BBP, Inc., with sales of $500,000, has the following balance sheet: The firm earns 15 percent on
Question:
BBP, Inc., with sales of $500,000, has the following balance sheet:
The firm earns 15 percent on sales and distributes 25 percent of its earnings. Using the percent of sales, forecast the new balance sheet for sales of $600,000 assuming that cash changes with sales and that the firm is not operating at capacity. Will the firm need external funds? Would your answer be different if the firm distributed all of its earnings?
Transcribed Image Text:
BBP, Incorporated Balance Sheet as of 12/31/X0 Assets Cash Accounts receivable Inventory Current assets Fixed assets Liabilities and Equity Accounts payable 15,000 20,000 50,000 85,000 100,000 165,000 $350,000 Total labilities and equity $350,000 $ 25,000 50,000 Accruals 75,000 Notes payable 50,000 Current liabilities 200,000 Common stock Retained earnings Total assets
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CashSales 25000500000 5 Accounts receivableSales 50000500000 10 InventorySales 7500...View the full answer
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Related Book For
Basic Finance An Introduction to Financial Institutions Investments and Management
ISBN: 978-1111820633
10th edition
Authors: Herbert B. Mayo
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