Baseline Assumptions

Income Statement

Unit sales increase to $2\mathrm{.}2$ million cubic yards and prices are raised by $7\%$

Cost per yard increases by $9\%$

Forecast interest expense using the rate on the debt and the end of year debt value

Forecast G&A using projected sales and the three year average of G&A$/$Sales

Forecast interest expense using pre$-$tax income and a three year average effective tax rate

Balance Sheet

Hold cash at $$4,180$

Forecast AR using projected sales and the three year average of AR$/$Sales

Forecast Inventory using projected COGS and the three year average of Inventory$/$COGS

Roll PPE forward based on Capex of $$16$M and Depreciation of $$7\mathrm{.}5$M

Forecast AP using projected sales and the three year average of AP$/$Sales

Forecast Other accrued expenses using projected sales and the three year average of Other accrued expense$/$Sales

Forecast Long$-$term debt based on a $$4$ million required repayment

Roll Owners' Equity forward based on net income and a $$3$ million dividend payment

$1.$ What is the external financing needed under the baseline assumptions?

$2.$ What is the external financing needed if the baseline assumptions are changed such that unit volume stays the same from the prior year and they increase prices by $4\%?$

$3.$ Revert your model back to the baseline assumptions.

Treat cash as the plug variable and change the dividend payment to $0.$ How much cash is on the balance sheet?

$4.$ Revert your model back to the baseline assumptions.

Treat debt as the plug variable. How much debt would be needed to make the balance sheet "balance" under the baseline assumptions.

$5.$ What is EBITDA for the firm in $2023?$

$6.$ What is the maximum debt capacity of the firm based on $3$x the $2023$ EBITDA?