The Starlight, Inc., financial statements for the fiscal year ended June 30, 2017, are presented below. The
Question:
The Starlight, Inc., financial statements for the fiscal year ended June 30, 2017, are presented below. The firm’s sales are projected to grow at a rate of 20 percent next year, and all financial statement accounts will vary directly with sales. Based on that projection, develop a pro forma balance sheet and income statement for the fiscal year ending June 30, 2018.
Financial StatementsFinancial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...
Starlight, Inc., Balance Sheet as of June 30, 2017 Liabilities and Stockholders' Assets: Equity: Accounts payable Notes payable $ 25,135 $ 67,855 Cash Accounts 36,454 43,758 receivable Inventories 167,112 $236,005 Total current Total current $104,309 liabilities assets Net fixed 325,422 Long-term debt 223,125 assets 150,000 Other assets 13,125 Common stock Retained earnings 97,118 Total $574,552 Total liabilities $574,552 and equity assets Starlight, Inc., Income Statement for the Fiscal Year Ended June 30, 2017 Net sales $1,450,000 Costs 812,500 $ 637,500 EBITDA Depreciation 175,000 $ 462,500 89,575 $ 372,925 EBIT Interest EBT Тахes (35%) 130,524 Net income $ 242,401
Step by Step Answer:
The pro forma statements for Starlight are as follows Starlight Inc ...View the full answer
Fundamentals of Corporate Finance
ISBN: 978-1119371403
4th edition
Authors: Robert Parrino, David S. Kidwell, Thomas Bates
Related Video
Depreciation of non-current assets is the process of allocating the cost of the asset over its useful life. The cost of the asset includes the purchase price, any additional costs incurred to bring the asset to its current condition and location, and any other costs that are directly attributable to the asset. The useful life of the asset is the period over which the asset is expected to be used by the company. To calculate the depreciation, companies use different methods such as straight-line, declining-balance, sum-of-the-years\'-digits, units-of-production, and group depreciation. The chosen method will depend on the type of asset, the company\'s accounting policies, and the accounting standards that are applicable. The straight-line method allocates an equal amount of the asset\'s cost over its useful life, while the declining-balance method calculates depreciation at a fixed rate, typically double the straight-line rate, but the amount of depreciation decreases over time. The sum-of-the-years\'-digits method is similar to the declining-balance method, but the rate of depreciation is calculated using a fraction that is based on the useful life of the asset. It\'s important to note that the depreciation expense will be recorded on the company\'s income statement and the accumulated depreciation will be recorded on the company\'s balance sheet. This will decrease the value of the asset on the balance sheet over time.
Students also viewed these Business questions
-
The Starlight, Inc. financial statements for the fiscal year ended June 30, 2013, are presented below. The firm's sales are projected to grow at a rate of 20 percent next year, and all financial...
-
A firm chooses to grow at a rate above its sustainable rate. What changes might we expect to see on the firms financial statements in the next year? What changes would result from growing at a rate...
-
A firm's earnings are expected to grow at a rate equal to the required rate of return for its equity, 12 percent. What is the trailing P/E ratio? What is the forward P/E ratio?
-
The trial balance for Hanna Resort Limited on August 31 is as follows: Additional information: 1. The balance in Prepaid Insurance includes the cost of four months premiums for an insurance policy...
-
After the concert discussed in Problem 2-3 is over and you and your friend are traveling home, you discuss how each of you might otherwise have used the four hours devoted to attending the concert....
-
When the following chiral epoxide is treated with aqueous sodium hydroxide, only one product is obtained, and that product is achiral. Draw the product and explain why only one product is formed.
-
Discuss the impact of changes to the project and how they are handled in the context of cash flow.
-
For the following highway network system, determine the maximal flow in vehicles per hour: The highway commission is considering adding highway section 34 to permit a flow of 2000 vehicles per hour...
-
The SNHU Pet Supply Company is a 30-year-old organization based in Manchester, New Hampshire that produces and sells pet supplies. The company has 200 employees in Manchester; 100 employees in a...
-
Muriel has a line of credit with a limit of $10 000. She owed $8195 on July 1. Principal withdrawals for the period July 1 to November 30 were $3000 on August 20 and $600 on October 25. The line of...
-
What is the plug value in a financial model?
-
Northwood Corp. has a dividend payout ratio of 60 percent, return on equity of 14.5 percent, total assets of $11,500,450, and equity of $4,652,125. Calculate the fi rms internal rate of growth (IGR).
-
Consider two concentric horizontal cylinders of diameters 55 cm and 65 cm, and length 125 cm. The surfaces of the inner and outer cylinders are maintained at 54°C and 106°C, respectively....
-
You would like to compare the risk and return of two mutual funds. You have the following information: Which fund do you think is more desirable? Explain. Expected return Standard deviation Fund A...
-
Suppose a bag contains 12 balls distributed as follows: five red dotted balls, two red striped balls, one gray dotted ball, and four gray striped balls. (a) Suppose you draw a red ball from the bag....
-
Suppose you are flipping a fair coin. (a) Find the probability of flipping four heads in a row. (b) Find the probability of flipping H T H T H. (c) Find the probability of flipping five heads in six...
-
Find the probability of rolling a 1 on the first roll of a die, a 2 on the second, and a 3 on the third.
-
The following table, reprinted from the November 20, 1991, Wall Street Journal, shows the percentage change of stock prices for ten Dow Jones sectors over two different periods. (a) Calculate the...
-
In Problem the given two-parameter family is a solution of the indicated differential equation on the interval (, ). Determine whether a member of the family can be found that satisfies the boundary...
-
Sue Deliveau opened a software consulting firm that immediately paid $2,000 for a computer. Was this event a transaction for the business?
-
Non constant Growth Storico Co. just paid a dividend of $2.75 per share. The company will increase its dividend by 20 percent next year and will then reduce its dividen4 growth rate by 5 percentage...
-
Non constant Growth this ones a little harder. Suppose the current share price for the firm in the previous problem is S60.98 and all the dividend information remains the same. What required return...
-
Constant Dividend Growth Model Assume a stock has dividends that grow at a constant rate forever. If you value the stock using the constant dividend growth model, how many years worth of dividends...
-
Make recommendations for Under Armour's target group (Active lifestyle customers: who values Under Armour apparel's comfortable, breathability and moisture-wicking features, and digital fitness app)...
-
To create 3 scenarios (positive, neutral and negative) for the development of the restaurant. Include the following important factors in your assessments: border trade as one of the most important...
-
Joanne bought a gift for her friend's birthday from an online website. The service provider failed to deliver the gift on the day it had promised. To compensate, the service provider provided coupons...
Study smarter with the SolutionInn App