CCA ltd. has sales of $6,000 and the following balance sheet.

Assets	Current	Forecasted	Liab. & Equity	Current	Forecasted
Cash	$100		Accounts payable	$900
Accounts rec.	600		Long term debt	1050
Inventory	1200		Equity	1950
Plant	2000
Total	3900		Total	3900

Assume that all current assets and current liabilities change with sales and that sales are expected to grow to $8,000.

a. Use the percent of sales forecasting method to forecast these values and enter them in the forecast column of the balance sheet above.

b. The net profit margin (what the firm earns on sales) is 8%.Forecast the new level of equity and enter it in the forecast column of the balance sheet above.

c. Complete the balance sheet. Does the firm require additional external financing hint EFR calculation)? If so, how much?

Answer rating: 100% (QA)

Computation of the following abc a b Particulars Current Proj... View the full answer