The Optimal Scam Company would like to see its sales grow at 20 percent for the...

    

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The Optimal Scam Company would like to see its sales grow at 20 percent for the foreseeable future. Its financial statements for the current year are presented below Balance Sheet ($ millions) Current Asset Income Statement ($ millions) 32,00 28,97 3,03 1,03 2,00 1,40 Retain Earnings 0,60 Sales 16 Costs Fixed Asset 16 32 Gross Profit Taxes Total Asset Net Income Current Debt 10 Dividends Long-Term Debt 4 Total Debt 14 Common Stock 14 Retained Earnings 4 Total Liab & Eg 32 The current financial policy of the Optimal Scam Company includes Dividend-payout ratio (d) = 70% Debt-to-equity ratio (L) = 77.78% Net profit margin (P) = 6.25% Assets-sales ratio (T) = 1 a. Determine Optimal Scam's need for external funds next year. b. Construct a pro forma balance sheet for Optimal Scam. c. Calculate the sustainable growth rate for the Optimal Scam Company. d. How can Optimal Scam change its financial policy to achieve its growth objective? The Optimal Scam Company would like to see its sales grow at 20 percent for the foreseeable future. Its financial statements for the current year are presented below Balance Sheet ($ millions) Current Asset Income Statement ($ millions) 32,00 28,97 3,03 1,03 2,00 1,40 Retain Earnings 0,60 Sales 16 Costs Fixed Asset 16 32 Gross Profit Taxes Total Asset Net Income Current Debt 10 Dividends Long-Term Debt 4 Total Debt 14 Common Stock 14 Retained Earnings 4 Total Liab & Eg 32 The current financial policy of the Optimal Scam Company includes Dividend-payout ratio (d) = 70% Debt-to-equity ratio (L) = 77.78% Net profit margin (P) = 6.25% Assets-sales ratio (T) = 1 a. Determine Optimal Scam's need for external funds next year. b. Construct a pro forma balance sheet for Optimal Scam. c. Calculate the sustainable growth rate for the Optimal Scam Company. d. How can Optimal Scam change its financial policy to achieve its growth objective?

Answer rating: 100% (QA)

The Optimal scam Company Sales 3212 384 Less Costs289712 34764 Gross profit 3636 Less Taxes103303363... View the full answer