Question

Comparative income statements and balance sheets for Coca-Cola are shown below ($ millions).


Required:
a. Use the following ratios to prepare a projected income statement, balance sheet, and statement of cash flows for Year 3.
Sales growth. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.02%
Gross profit margin. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69.92%
Selling, general, and administrative expense/Sales . . . . . . . 39.28%
Depreciation expense/Prior-year PPE gross . . . . . . . . . . . . . . 12.14%
Interest expense/Prior-year long-term debt. . . . . . . . . . . . . . 5.45%
Income tax expense/Pretax income . . . . . . . . . . . . . . . . . . . . 29.88%
Accounts receivable turnover . . . . . . . . . . . . . . . . . . . . . . . . 10.68
Inventory turnover . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.73
Accounts payable turnover . . . . . . . . . . . . . . . . . . . . . . . . . . 1.64
Taxes payable/Tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . 50.33%
Total assets/Stockholders’ equity (financial leverage). . . . . . 2.06
Dividends per share. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1.37
Capital expenditures/Sales . . . . . . . . . . . . . . . . . . . . . . . . . . 5.91%
b. Based on your initial projections, how much external financing (long-term debt and/or stockholders’ equity) will Coca-Cola need to fund its growth at projected increases insales?


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  • CreatedJanuary 22, 2015
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