Use a top line sales growth rate of 10% to project next year's EFN assuming Equity Corp is already at full capacity.Identify which specific line items follow the Percentage of Sales Approach in the space provided.Use a 21% tax rate going forward and assume the retention rate will remain constant.Briefly interpret your EFN and how you might approach integrating it into the balance sheet from a sources and uses of funds standpoint.

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Percentage #4 Income Statement* 2020 of Sales 10% Growth Sales $4,498 Costs $4,164 Taxable $334 Taxes $93 Net Income $241 Dvidends $109 Add. to RE $132 Percentage Balance Sheet* Current of Sales 10% Growth Cash $285 Accts. Receivable $646 Inventory $832 Total Current Assets $1,763 Net Plant & Equip. $1,655 Total Assets $3,418 Accts. Payable $582 Notes Payable $605 Total Current Liab. $1,187 Long-term Debt $885 Total Liabilities $2,072 C/S & Paid in Surplus $162 Retained Earnings $1,184 Stockholders' Equity $1,346 Total Liab. & Stock Eq. $3,418 EFN * Millions of US$ #5 Calculations in cells below underline ROA b Internal Growth ROE b Sustainable Growth Percentage #4 Income Statement* 2020 of Sales 10% Growth Sales $4,498 Costs $4,164 Taxable $334 Taxes $93 Net Income $241 Dvidends $109 Add. to RE $132 Percentage Balance Sheet* Current of Sales 10% Growth Cash $285 Accts. Receivable $646 Inventory $832 Total Current Assets $1,763 Net Plant & Equip. $1,655 Total Assets $3,418 Accts. Payable $582 Notes Payable $605 Total Current Liab. $1,187 Long-term Debt $885 Total Liabilities $2,072 C/S & Paid in Surplus $162 Retained Earnings $1,184 Stockholders' Equity $1,346 Total Liab. & Stock Eq. $3,418 EFN * Millions of US$ #5 Calculations in cells below underline ROA b Internal Growth ROE b Sustainable Growth

Answer rating: 100% (QA)

Here are the steps to project Equity Corps EFN for next year assuming a 10 sales growth rate and capacity is already at full 1 Project sales for next ... View the full answer