Explain the effect of higher growth sales on dividend and retained earnings to this company and the effect of lower growth sales on the same.

 

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3:50 PM Sun Sep 25 911-412 Sales Cost of goods sold Gross margin Research & development Sell, general & administrative Operating income Interest expense Profit before tax Income tax Net income Exhibit 1 SciTronics, Inc. Consolidated Income Statements 2005-2008 ($ in thousands) Source: Company documents. Cash Accounts receivable Inventories Other current assets Total current assets Net property & equipment Other Total assets Notes payable Accounts payable Accrued expenses Other current liabilities Total current liabilities Long-term senior debt Subordinated convertible debt Other liabilities Owners' equity Treasury stock Owners' equity 12 Total liabilities and equity Source: Company documents. 2004 services.hbsp.harvard.edu $115,000 2005 $147,000 43,000 104,000 15,000 79,000 $ 9,000 42,000 21,000 10,000 82,000 9,000 2,000 $93,000 ... $3,000 5,000 10,000 3,000 Exhibit 2 SciTronics, Inc. Consolidated Balance Sheet at December 31, 2005-2008 ($ in thousands) 21,000 10,000 1,000 61,000 2005 61,000 $93,000 Assessing a Company's Future Financial Health 10,000 1,000 7,000 8,000 2,000 3,000 $ 5,000 $ 5,000 $ 5,000 Assessing a Company's Future Financial Health 9,000 4,000 2006 $171,000 $205,000 50,000 63,000 121,000 142,000 20,000 26,000 92,000 106,000 9,000 2,000 2006 $ 10,000 53,000 28,000 13,000 104,000 12,000 2,000 $118,000 $ 18,000 6,000 13,000 3,000 2007 40,000 9,000 3,000 66,000 10,000 2,000 66,000 $118,000 2007 $ 15,000 61,000 30,000 21,000 127,000 13,000 6,000 $146,000 $ 8,000 7,000 21,000 4,000 40,000 8,000 20,000 7,000 71,000 2008 71,000 $146,000 $244,000 74,000 170,000 28,000 116,000 26,000 2,000 24,000 10,000 $ 14,000 2008 $ 18,000 66,000 29,000 20,000 133,000 18,000 8,000 $159,000 $10,000 6,000 28,000 4,000 48,000 7,000 20,000 9,000 85,000 (10,000) 75,000 $159,000 This document is authorized for use only by Melissa Adamson in FIN-320-X1211 Principles of Finance 22EW1 at Southern New Hampshire University, 2022. 911-412 45% 3:50 PM Sun Sep 25 911-412 Sales Cost of goods sold Gross margin Research & development Sell, general & administrative Operating income Interest expense Profit before tax Income tax Net income Exhibit 1 SciTronics, Inc. Consolidated Income Statements 2005-2008 ($ in thousands) Source: Company documents. Cash Accounts receivable Inventories Other current assets Total current assets Net property & equipment Other Total assets Notes payable Accounts payable Accrued expenses Other current liabilities Total current liabilities Long-term senior debt Subordinated convertible debt Other liabilities Owners' equity Treasury stock Owners' equity 12 Total liabilities and equity Source: Company documents. 2004 services.hbsp.harvard.edu $115,000 2005 $147,000 43,000 104,000 15,000 79,000 $ 9,000 42,000 21,000 10,000 82,000 9,000 2,000 $93,000 ... $3,000 5,000 10,000 3,000 Exhibit 2 SciTronics, Inc. Consolidated Balance Sheet at December 31, 2005-2008 ($ in thousands) 21,000 10,000 1,000 61,000 2005 61,000 $93,000 Assessing a Company's Future Financial Health 10,000 1,000 7,000 8,000 2,000 3,000 $ 5,000 $ 5,000 $ 5,000 Assessing a Company's Future Financial Health 9,000 4,000 2006 $171,000 $205,000 50,000 63,000 121,000 142,000 20,000 26,000 92,000 106,000 9,000 2,000 2006 $ 10,000 53,000 28,000 13,000 104,000 12,000 2,000 $118,000 $ 18,000 6,000 13,000 3,000 2007 40,000 9,000 3,000 66,000 10,000 2,000 66,000 $118,000 2007 $ 15,000 61,000 30,000 21,000 127,000 13,000 6,000 $146,000 $ 8,000 7,000 21,000 4,000 40,000 8,000 20,000 7,000 71,000 2008 71,000 $146,000 $244,000 74,000 170,000 28,000 116,000 26,000 2,000 24,000 10,000 $ 14,000 2008 $ 18,000 66,000 29,000 20,000 133,000 18,000 8,000 $159,000 $10,000 6,000 28,000 4,000 48,000 7,000 20,000 9,000 85,000 (10,000) 75,000 $159,000 This document is authorized for use only by Melissa Adamson in FIN-320-X1211 Principles of Finance 22EW1 at Southern New Hampshire University, 2022. 911-412 45% 3:50 PM Sun Sep 25 911-412 Sales Cost of goods sold Gross margin Research & development Sell, general & administrative Operating income Interest expense Profit before tax Income tax Net income Exhibit 1 SciTronics, Inc. Consolidated Income Statements 2005-2008 ($ in thousands) Source: Company documents. Cash Accounts receivable Inventories Other current assets Total current assets Net property & equipment Other Total assets Notes payable Accounts payable Accrued expenses Other current liabilities Total current liabilities Long-term senior debt Subordinated convertible debt Other liabilities Owners' equity Treasury stock Owners' equity 12 Total liabilities and equity Source: Company documents. 2004 services.hbsp.harvard.edu $115,000 2005 $147,000 43,000 104,000 15,000 79,000 $ 9,000 42,000 21,000 10,000 82,000 9,000 2,000 $93,000 ... $3,000 5,000 10,000 3,000 Exhibit 2 SciTronics, Inc. Consolidated Balance Sheet at December 31, 2005-2008 ($ in thousands) 21,000 10,000 1,000 61,000 2005 61,000 $93,000 Assessing a Company's Future Financial Health 10,000 1,000 7,000 8,000 2,000 3,000 $ 5,000 $ 5,000 $ 5,000 Assessing a Company's Future Financial Health 9,000 4,000 2006 $171,000 $205,000 50,000 63,000 121,000 142,000 20,000 26,000 92,000 106,000 9,000 2,000 2006 $ 10,000 53,000 28,000 13,000 104,000 12,000 2,000 $118,000 $ 18,000 6,000 13,000 3,000 2007 40,000 9,000 3,000 66,000 10,000 2,000 66,000 $118,000 2007 $ 15,000 61,000 30,000 21,000 127,000 13,000 6,000 $146,000 $ 8,000 7,000 21,000 4,000 40,000 8,000 20,000 7,000 71,000 2008 71,000 $146,000 $244,000 74,000 170,000 28,000 116,000 26,000 2,000 24,000 10,000 $ 14,000 2008 $ 18,000 66,000 29,000 20,000 133,000 18,000 8,000 $159,000 $10,000 6,000 28,000 4,000 48,000 7,000 20,000 9,000 85,000 (10,000) 75,000 $159,000 This document is authorized for use only by Melissa Adamson in FIN-320-X1211 Principles of Finance 22EW1 at Southern New Hampshire University, 2022. 911-412 45%

Answer rating: 100% (QA)

Higher growth sales can have a positive effect on both dividend and retained earnings for SciTronics ... View the full answer