Use the pro forma financial statements to answer the questions below. Change the assumptions in the...
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Use the pro forma financial statements to answer the questions below. Change the assumptions in the assumptions box as needed to answer the questions. In addition to the assumptions listed on the spreadsheet, also assume that all asset accounts will grow at the same rate as sales, and that no new equity will be issued in 2024. a. Enter formulas for each of the income statement and balance sheet accounts listed below for 2024 (projected) to determine the forecasted amounts for Ash. b. Enter a formula for external funding required in the first green box. How much external financing does Ash need in 2024? Enter a formula for sustainable growth rate. What is the sustainable growth rate for Ash? ASTLE CORD INCOME STATEMENT ($ millions) Actual BALANCE SHEET (S millions) Projected Actual Projected 2023 2024 2023 2024 Sales $4,500 $5,310 Cash $150 Cost of goods sold 2,925 3,717 Accounts receivable 540 Operating expense 480 $ 637.20 Inventory 1,050 EBIT 1,095 956 Total current assets 1,740 Interest expense 68 91 Property, plant, & equipment 1,578 EBT 1,027 865 Total assets 3,318 Tax 308 389 Net income $719 476 Total debt 1,106 Shareholders' equity 2,212 Assumptions for 2024 Total liabilities & equity $3,318 Sales growth rate Cost of goods sold/sales Operating expense/sales Dividend payout ratio 18.0% 70.0% External funding required 12.0% Sustainable growth rate 40.0% Tax rate Interest rate on debt Total debt/equity 45.0% 8.2% 50.0% Use the pro forma financial statements to answer the questions below. Change the assumptions in the assumptions box as needed to answer the questions. In addition to the assumptions listed on the spreadsheet, also assume that all asset accounts will grow at the same rate as sales, and that no new equity will be issued in 2024. a. Enter formulas for each of the income statement and balance sheet accounts listed below for 2024 (projected) to determine the forecasted amounts for Ash. b. Enter a formula for external funding required in the first green box. How much external financing does Ash need in 2024? Enter a formula for sustainable growth rate. What is the sustainable growth rate for Ash? ASTLE CORD INCOME STATEMENT ($ millions) Actual BALANCE SHEET (S millions) Projected Actual Projected 2023 2024 2023 2024 Sales $4,500 $5,310 Cash $150 Cost of goods sold 2,925 3,717 Accounts receivable 540 Operating expense 480 $ 637.20 Inventory 1,050 EBIT 1,095 956 Total current assets 1,740 Interest expense 68 91 Property, plant, & equipment 1,578 EBT 1,027 865 Total assets 3,318 Tax 308 389 Net income $719 476 Total debt 1,106 Shareholders' equity 2,212 Assumptions for 2024 Total liabilities & equity $3,318 Sales growth rate Cost of goods sold/sales Operating expense/sales Dividend payout ratio 18.0% 70.0% External funding required 12.0% Sustainable growth rate 40.0% Tax rate Interest rate on debt Total debt/equity 45.0% 8.2% 50.0%
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