The following pro forma balance sheet/balance sheet reflects the company's estimates of the financial impact of 100%
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Question:
The following pro forma balance sheet/balance sheet reflects the company's estimates of the financial impact of 100% revenue growth:
Caswell Publishing Co. | Caswell Publishing Co. | ||
Libra of 2010 | Balance Pro Forma 2011 | 100% | |
Current assets | 12,000,000 | Current assets | 24,000,000 |
Net fixed assets | 18,230,000 | Net fixed assets | 36.460.000 |
Total | 30,230,000 | Total | 60.460.000 |
Accounts payable | 2,030,000 | Accounts payable | 4,060,000 |
Accumulated expenses | 2,010,000 | Accumulated expenses | 4,020,000 |
Pay | 1,570,000 | Pay | 1,570,000 |
Current liabilities | 5,610,000 | Current liabilities | 9,650,000 |
long term debt | 6.480.000 | long term debt | 6.480.000 |
Full responsibility | 12,090,000 | Full responsibility | 16,130,000 |
Common shares (at par) | 1,020,000 | Common shares (at par) | 1,020,000 |
Paid in capital | 2,040,000 | Paid in capital | 2,040,000 |
Retained earnings | 15,080,000 | Retained earnings | 15,080,000 |
Common equity | 18,140,000 | Common equity | 18,140,000 |
Total | 30,230,000 | Projected financing sources | 34,270,000 |
Discretionary financing needs | |||
Total financing needs=Total assets |
Required
a. How much new discretionary funding will Caswell require based on above estimates?
b. Given the nature of the new contract and the specific financing needs the company expects, what recommendations could you offer to the company's CFO regarding the specific sources of financing the company should pursue to meet its DFN of the following:
promissory notes, retained earnings, Sale of Fixed Assets, Long-Term Debt, Common Stock.
Related Book For
Financial Management Principles and Applications
ISBN: 978-0134417219
13th edition
Authors: Sheridan Titman, Arthur J. Keown, John H. Martin
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