EXERCISE 1

EXERCISE 2

Show the FORMULAS used please

In the first exercise Growth in Sales is: 26.022%

In the second one Dividen rate 2018 is: 26.022%

Assumptions 1. Sales will grow 1,012% Next year Ex 1: Fill the numbers for 2018 based on percent of sales method Answer the question below Income statement 2017 2018 Sales Cost of sales (not incl depreciation) EBITDA 1000 500 500 Depreciation EBIT 200 300 Interest expenses Pretax income 50 250 Income tax (35%) Net Income 87,5 162,5 Question On how much (%) the net income will grow next year? Assumptions 1. Percent of sales method 2. Dividend rate 0% in 2017, Dividend rate 2018 1,012% Task Complete pro forma balance sheet for 2018 Calculate net new financing required in 2018 (hint: it is a difference between [assets - (liabilities+equity)] in 2018) hint2: equity 2018-equity 2017 + retained earnings in 2018 Additional info from income statement Sales Net Income 1000 162,5 1010 180 2017 2018 PRO FORMA BALANCE SHEET ASSETS Current assets cash accounts receivable inventories Total: Current assets 50 50 400 500 Long term assets 500 Total 1000 LIABILITIES Current liabilities 200 Debt 300 Total 500 EQUITY Stockholders Equity 500 Total: Equity 500 Total Liabilities and Equity 1000 Net new financing required in 2018 Assumptions 1. Sales will grow 1,012% Next year Ex 1: Fill the numbers for 2018 based on percent of sales method Answer the question below Income statement 2017 2018 Sales Cost of sales (not incl depreciation) EBITDA 1000 500 500 Depreciation EBIT 200 300 Interest expenses Pretax income 50 250 Income tax (35%) Net Income 87,5 162,5 Question On how much (%) the net income will grow next year? Assumptions 1. Percent of sales method 2. Dividend rate 0% in 2017, Dividend rate 2018 1,012% Task Complete pro forma balance sheet for 2018 Calculate net new financing required in 2018 (hint: it is a difference between [assets - (liabilities+equity)] in 2018) hint2: equity 2018-equity 2017 + retained earnings in 2018 Additional info from income statement Sales Net Income 1000 162,5 1010 180 2017 2018 PRO FORMA BALANCE SHEET ASSETS Current assets cash accounts receivable inventories Total: Current assets 50 50 400 500 Long term assets 500 Total 1000 LIABILITIES Current liabilities 200 Debt 300 Total 500 EQUITY Stockholders Equity 500 Total: Equity 500 Total Liabilities and Equity 1000 Net new financing required in 2018