The management of Hearth and Home provides you with the following projections of net sales (in...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
The management of Hearth and Home provides you with the following projections of net sales (in 000's) for the next three years: 20Y4 - $4,070; 20Y5 - $4,680; 20Y6 - $5,538. How would you characterize the assumptions used in making these projections? Conservative - projected sales growth is below historical levels Plausible - projected sales growth is at historical levels Plausible - projected sales growth is slightly above historical levels, but achievable Aggressive projected sales growth is considerably above historical levels ASSETS Current assets Cash Accounts receivable Inventory Other current assets Total current assets Fixed assets Trademarks and goodwill TOTAL ASSETS LIABILITIES AND OWNERS' EQUITY Current liabilities Current portion-LTD Notes payable Accounts payable Accrued expenses Other current liabilities Total current liabilities Long-term debt Other noncurrent liabilities Balance Sheets (in $000s) As At June 30: Working investment $ Owners' equity TOTAL LIABILITIES AND OWNERS' EQUITY $ $ 20Y3 66 376 547 107 1,096 313 107 1,516 67 101 244 69 46 527 330 20 639 1,516 610 $ $ 20Y2 123 303 461 70 957 $ 257 $ 1,285 71 67 5 204 64 28 368 397 19 501 496 20Y1 100 240 417 117 874 $ 245 71 $ 1,190 67 0 148 57 47 319 464 $ 1,285 $ 1,190 18 389 452 Sales Cost of goods sold Gross profit Interest expense Depreciation expense Operating expense Profit before taxes Taxes Net profit after taxes Dividends Earnings retained Income Statements (in $000s) Years Ended June 30: $ $ 20Y3 3,570 2,467 1,103 36 60 586 421 188 233 95 $ $ 138 $ 20Y2 3,000 2,093 907 33 52 477 345 149 196 84 112 $ $ $ 20Y1 2,500 1,773 727 36 50 371 270 108 162 65 97 The management of Hearth and Home provides you with the following projections of net sales (in 000's) for the next three years: 20Y4 - $4,070; 20Y5 - $4,680; 20Y6 - $5,538. How would you characterize the assumptions used in making these projections? Conservative - projected sales growth is below historical levels Plausible - projected sales growth is at historical levels Plausible - projected sales growth is slightly above historical levels, but achievable Aggressive projected sales growth is considerably above historical levels ASSETS Current assets Cash Accounts receivable Inventory Other current assets Total current assets Fixed assets Trademarks and goodwill TOTAL ASSETS LIABILITIES AND OWNERS' EQUITY Current liabilities Current portion-LTD Notes payable Accounts payable Accrued expenses Other current liabilities Total current liabilities Long-term debt Other noncurrent liabilities Balance Sheets (in $000s) As At June 30: Working investment $ Owners' equity TOTAL LIABILITIES AND OWNERS' EQUITY $ $ 20Y3 66 376 547 107 1,096 313 107 1,516 67 101 244 69 46 527 330 20 639 1,516 610 $ $ 20Y2 123 303 461 70 957 $ 257 $ 1,285 71 67 5 204 64 28 368 397 19 501 496 20Y1 100 240 417 117 874 $ 245 71 $ 1,190 67 0 148 57 47 319 464 $ 1,285 $ 1,190 18 389 452 Sales Cost of goods sold Gross profit Interest expense Depreciation expense Operating expense Profit before taxes Taxes Net profit after taxes Dividends Earnings retained Income Statements (in $000s) Years Ended June 30: $ $ 20Y3 3,570 2,467 1,103 36 60 586 421 188 233 95 $ $ 138 $ 20Y2 3,000 2,093 907 33 52 477 345 149 196 84 112 $ $ $ 20Y1 2,500 1,773 727 36 50 371 270 108 162 65 97
Expert Answer:
Answer rating: 100% (QA)
Correct option is a Conservative projected sales growth is be... View the full answer
Related Book For
Accounting
ISBN: 978-1337899451
27th edition
Authors: Carl S. Warren, James M. Reeve, Jonathan Duchac
Posted Date:
Students also viewed these marketing questions
-
The balance sheets for Sports Unlimited for 2015 and 2014 are provided below. Required: 1. Prepare a vertical analysis of Sports Unlimiteds 2015 and 2014 balance sheets. Express each amount as a...
-
Assume you are the vice president of operations for HG Lang and you are preparing for a meeting to discuss the 2012 financial results with Adrienne Aiello, the company president. HG Lang Designs...
-
HG Lang is planning to open a new store in Miami that will be financed in part by a new bank loan of $1,500,000. HG Lang Designs operates an exclusive bridal boutique in Manhattan. All gowns are...
-
The fraud examiner's report should have what characteristics? a. Accuracy and clarity b. Relevant and material information c. Should not contain opinions or prejudices of fraud examiner. d. All of...
-
On February 1, 2013, the Xilon Corporation issued 50,000 shares of its nopar common stock in exchange for five acres of land located in the city of Monrovia. On the date of the acquisition, Xilons...
-
A 0.6407-g sample containing chloride and iodide ions gave a silver halide precipitate weighing 0.4430 g. This precipitate was then strongly heated in a stream of Cl2 gas to convert the AgI to AgCl;...
-
How to amend a pleading once it is filed with the court?
-
Giant Jets is a French company that produces jet airplanes for commercial cargo companies. The selling price (in euros) per jet is 1,000,000. Currently the company uses actual volumes to allocate...
-
What are an organization\'s outsourcing decisions and constrained resource decisions? Provide a suitable numerical example of these decisions and explain how quantitative and qualitative...
-
A company wants to build a website where user can register themselves and buy/renew health insurance policies. Also, they can process claims from a separate section on the website. Once logged in,...
-
(b) Consider two CPUS P1 and P2, each implementing the same ISA and executing a program P. Program P comprises four classes of instructions: A, B, C, and D. The clock frequency of each CPU and CPI...
-
Consider a system described by the quasispin model of Problem 31.3 for $G>0$ with two identical fermions in a single $j$-shell. Show that the allowed seniorities are $v=0,2$, the allowed angular...
-
A point charge \(q=+5 \mathrm{nC}\) is at the center of a thick conducting spherical shell of internal radius \(10 \mathrm{~cm}\) and external radius \(12 \mathrm{~cm}\). (a) What is the magnitude...
-
Use the thermal-diffusivity value estimated from the above problem to find out whether any part of a fruit of diameter \(8 \mathrm{~cm}\) hanging in a tree will freeze if the ambient temperature...
-
At a point in a dryer benzene is evaporating from a solid. The air temperature is \(80^{\circ} \mathrm{C}\) and the pressure is \(1 \mathrm{~atm}\). The relative humidity of benzene in air is \(65...
-
An enterprise purchases an item of machinery on 1 April 2012 for ` 1,00,000. It depreciates this item at the rate of 10 per cent per annum on straight-line basis. On 1 April 2015, the enterprise...
-
Consider the function of P'(t) given in the graph below. Given that P (0) = 3, find P (4). dp/dt 18+ O -18 1 P (4)= -31 P(4) =-34 P(4) = -35 P (4)= -33 2 3 4 +t
-
Stephen Schor, an accountant in New York City, advised his client, Andre Romanelli, Inc., to open an account at J. P. Morgan Chase Bank, N.A., to obtain a favorable interest rate on a line of credit....
-
The prepaid insurance account had a balance of $3,000 at the beginning of the year. The account was debited for $32,500 for premiums on policies purchased during the year. Journalize the adjusting...
-
Two income statements for Cornea Company follow: a. Prepare a vertical analysis of Cornea Company's income statements. b. Does the vertical analysis indicate a favorable or an unfavorable trend?...
-
On October 31, Legacy Rocks Inc., a marble contractor, issued for cash 400,000 shares of $10 par common stock at $18, and on November 19, it issued for cash 50,000 shares of preferred stock, $75 par...
-
Which are qualitative and which are quantitative? a. The number of patients admitted to a hospital on a given day b. The model of car last sold by a particular car dealer c. The name of your favorite...
-
A telephone company wants to estimate the proportion of customers who are satisfied with their service. They use a computer to generate a list of random phone numbers and call those people to ask...
-
A polling organization placed telephone calls to 1000 people in a certain city to ask them whether they favor a tax increase to build a new school. Two hundred people answered the phone, and 150 of...
Study smarter with the SolutionInn App