Problem I (20 points): Given the assumptions from 2013 to 2015, please assume that the financial...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Problem I (20 points): Given the assumptions from 2013 to 2015, please assume that the financial ratios in 2016 is the average of those of the first three years, answer the following questions. (Note: Try to give formulas you use or the calculating procedure to justify your answers.) 1) Using the method we learned in class, fill the following assumption form as well as Pro Forma financial statements of firm WNS for 2016. (15 points) 2) Compute the CFFA for firm WNS in 2016. (5 points) + Projection Assumptions (K) Sales Cost of goods sold ratio Operating expenses ratio Tax Rate Deprecation Interest (to be )paid Cash/Sales Days' sales in receivables Days' sales in inventory Net Fixed Asset Turnover Days to pay payables Other current liabilities/Sales Ending inventory Net Fixed Asset Net working capital 2013 100.00% 75.2% 21.30% 0.35 10 5 1% 43.4 59.4 12.5 10 1.50% N/a N/a N/a 2014 100.00% 75% 20.60% 0.35 10 5 1% 43.4 59.4 12.5 10 1.50% N/a N/a N/a 2015 100.00% 75.8% 20.30% 0.35 10 5 1% 43.4 59.4 12.5 10 1.50% 587 410 1100 2016 100.00% = - = = = Pro Forma Income Statement, WNS 2016 Sales Cost of Goods Sold Gross Profit Operating Expense Depreciation EBIT Interest EBT Tax Net Income Part of Pro Forma Balance Sheet, WNS 2016 Cash Accounts Receivable Inventory Current Assets Net Fixed Assets Accounts Payable Other current liabilities Current Liability 5500 Problem I (20 points): Given the assumptions from 2013 to 2015, please assume that the financial ratios in 2016 is the average of those of the first three years, answer the following questions. (Note: Try to give formulas you use or the calculating procedure to justify your answers.) 1) Using the method we learned in class, fill the following assumption form as well as Pro Forma financial statements of firm WNS for 2016. (15 points) 2) Compute the CFFA for firm WNS in 2016. (5 points) + Projection Assumptions (K) Sales Cost of goods sold ratio Operating expenses ratio Tax Rate Deprecation Interest (to be )paid Cash/Sales Days' sales in receivables Days' sales in inventory Net Fixed Asset Turnover Days to pay payables Other current liabilities/Sales Ending inventory Net Fixed Asset Net working capital 2013 100.00% 75.2% 21.30% 0.35 10 5 1% 43.4 59.4 12.5 10 1.50% N/a N/a N/a 2014 100.00% 75% 20.60% 0.35 10 5 1% 43.4 59.4 12.5 10 1.50% N/a N/a N/a 2015 100.00% 75.8% 20.30% 0.35 10 5 1% 43.4 59.4 12.5 10 1.50% 587 410 1100 2016 100.00% = - = = = Pro Forma Income Statement, WNS 2016 Sales Cost of Goods Sold Gross Profit Operating Expense Depreciation EBIT Interest EBT Tax Net Income Part of Pro Forma Balance Sheet, WNS 2016 Cash Accounts Receivable Inventory Current Assets Net Fixed Assets Accounts Payable Other current liabilities Current Liability 5500
Expert Answer:
Answer rating: 100% (QA)
Sales Cost of goods sold ratio Operating expenses ratio Tax Rate Depreciation Interest to be paid Ca... View the full answer
Related Book For
Fundamentals of Corporate Finance
ISBN: 978-1118845899
3rd edition
Authors: Robert Parrino, David S. Kidwell, Thomas W. Bates
Posted Date:
Students also viewed these finance questions
-
Determine the regression equation Negative amounts should be indicated by a minus sign Round your answers to 3 decimal places X Y Picture Picture Picture 2 Picture 2 Picture Picture 5 13 2375 5641 3...
-
How does the pretax operating cash flow for a project differ from the economic profit for that project?
-
Dallas Corporation reports the following amounts for Years 1 and 2: Each tax year is a 12-month period. Dallas qualifies as a small corporation for purposes of estimated tax payments, but it does not...
-
You accepted a new job with starting salary of $52,000 per year. The salary is expected to increase 4% each year. Now it is time to make a retirement plan for the next 39 years you expect to work....
-
Oberholser, Inc., has an issue of preferred stock outstanding that pays a $4.70 dividend every year, in perpetuity. If this issue currently sells for $103 per share, what is the required return?
-
In 2007, U.S. residents saved approximately $310 billion. In 2015, that amount was $784 billion, about two-and-a-half times greater. Which of the following graphs compares these totals more...
-
What is the difference between management accounting and the other two types of conventional accountingfinancial accounting and other accounting systems?
-
On the basis of the following data, determine the value of the inventory at the lower of cost or market. Assemble the data in the form illustrated in Exhibit8. Inventory Unit Unit Cost Price $ 80...
-
The Bodyshop has issued a bank-accepted bill to fund a short-term business project. The bill was issued for 180 days, with a face value of $1 800 000 and a yield of 9.87 per cent per annum. PART A:...
-
Question 1 According to a distribution network optimization conducted 5 years ago, all the demand of AL, GA, KY, SC, and TN is shipped from the warehouse located in Atlanta, GA. The warehouse in...
-
1. After the closing entries are posted to the ledger, each revenue account will have A. A zero balance. B. A debit balance. C. A credit balance. D. Either a debit or a credit balance. 2. A post...
-
Carla Vista Corporation had the following transactions. Sold land (cost $11,500) for $15,500. Issued common stock at par for $20,000. Recorded depreciation on buildings for $16.500. Paid salaries of...
-
Just after vertical launch from Earth surface, the space shuttle takes 8.0 s to reach a speed of 160 km/h. During this phase, what is the apparent weight of a 72 kg astronaut? Express your answer...
-
Define the concept of economics in the aspects of social institution and social science. And, What are the factors that create the economic problem?
-
Seong Gi-hun graduated from ABC College in Spring of 2021. In June of 2021 through July 2031, Seong worked with many high-end clients, mid-size businesses and small venture capitalists' pet projects....
-
Co Chip Corp had taxable income before taking a charitable contribution deduction of $25000. They made $4,000 in charitable donations that year. Year 2: Chip Corp had taxable income before taking a...
-
Are we what we buy, are we what we wear, are we what we eat, are we what we drive? Are the things/products/items we buy an extension of ourselves? What do the products communicate about ourselves?...
-
a. Determine the domain and range of the following functions.b. Graph each function using a graphing utility. Be sure to experiment with the window and orientation to give the best perspective of the...
-
Abacus Corporation will pay dividends of $2.25, $2.95, and $3.15in the next three years. After three years, the dividends are expected to grow at a constant rate of 4 percent per year. If the...
-
Kelly Martin has $10,000 that she can deposit into a savings account for five years. Bank A pays compounds interest annually, Bank B twice a year, and Bank C quarterly. Each bank has a stated...
-
Sunny Way Landscaping has a formal line of credit of $500,000 with First Commerce Bank. The interest rate on the loan is 6 percent, and under the agreement, Sunny Skies must pay an annual fee of 75...
-
A survey of 250 members from an organized union of over 20,000 members. In Exercises 1120, determine whether the data set is a population or a sample. Explain your reasoning.
-
The carbon monoxide levels of 12 of 49 people who escaped a burning building. In Exercises 1120, determine whether the data set is a population or a sample. Explain your reasoning.
-
The annual revenue of each team in a pro sports league. In Exercises 1120, determine whether the data set is a population or a sample. Explain your reasoning.
Study smarter with the SolutionInn App