what is the EFN

Using the percent sales method, estimate the amount of external financing XYZ corp will need to fund the next years operations only compute 3 iterations. Assume that Sales will grow by 20% from the 2012 level Assume that the firm will not purchase any additional assets Assume that depreciation expense will be $10 in 2013. Assume the interest rate on long-term debt will be 10% The tax rate is 30%

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Balance sheet Current Assets Fixed assets, net Total Assets Current liabilities Long-term debt (PLUG) Retained Earnings Liabilities and equity Income statement Sales COGS Gross margin Operating expense Depreciation Interest EBT Taxes Net income 2012 50 100 150 40 50 60 150 50 20 30 10 10 5 5 1.5 3.5 % of Sales 1 2013 2013 Iteration 2 2013 2013 3 2013 2013 Balance sheet Current Assets Fixed assets, net Total Assets Current liabilities Long-term debt (PLUG) Retained Earnings Liabilities and equity Income statement Sales COGS Gross margin Operating expense Depreciation Interest EBT Taxes Net income 2012 50 100 150 40 50 60 150 50 20 30 10 10 5 5 1.5 3.5 % of Sales 1 2013 2013 Iteration 2 2013 2013 3 2013 2013

Answer rating: 100% (QA)

See the below tables Last column tells how we arrived at the 2013 number And 1st column has formula ... View the full answer