6-1. AFN EQUATION Carter Corporation's sales are expected to increase from $5 million in 2015 to $6 million in 2016, or by 20%. Its assets totaled $3 million at the end of 2015. Carter is at full capacity, so its assets must grow in proportion to projected sales. At the end of 2015, current liabilities are $1 million, consisting of $250,000 of accounts payable, $500,000 of notes payable, and $250,000 of accrued liabilities. Its profit margin is forecasted to be 5%, and the forecasted retention ratio is 30%. Use the AFN equation to forecast the additional funds Carter will need for the coming year.
Q: LSP. Co, recently reported $200,000 of sales during the year 2016. The company had $20,000 of…
A: We need to find net income in this question. Net income is what available for distribution to…
Q: SALES INCREASE Pierce Furnishings generated $2 million in sales during 2015, and its year-end total…
A: Current sales= $2million Asset= $1.5 million Current Liabilities= $500,000 ($2,00,000 Notes Payable,…
Q: Morrissey Technologies Inc.’s 2015 financial statements are shown here. Suppose that in 2016, sales…
A: Pro-forma Balance Sheet- A pro-forma balance sheet is a tabulation of upcoming projections and can…
Q: AFN EQUATION Carter Corporation’s sales are expected to increase from $5 million in 2015 to $6…
A: According to the AFN (Additional fund needed) equation, this is assumed that the ratios of the…
Q: Mayor company sales are expected to increase by 20% from $5 million in 2018 to $6 million in 2019.…
A: AFN is additional funds needed for the coming year. Assets, spontaneous liabilities increase with…
Q: At year-end 2018, total assets for Arrington Inc. were$1.8 million and accounts payable were…
A: Part (a): Calculation of total liabilities in 2018: Answer: Total liabilities is $825,000 Formulas…
Q: At year-end 2020, RWD Inc.’s total assets were $1.2 million and its accounts payable were $375,000.…
A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: n 2016, the Allen Corporation had sales of $60 million, total assets of $47 million, and total…
A: Answer - Computation of Net Operating Income and Net Income - Particulars Working Amount…
Q: A firm is anticipated to generate an EBIT of $2 million, with depreciation of $200,000, change in…
A: Given information: EBIT : $2 million Depreciation : $200,000 Change in Net working capital :…
Q: Edmonds expected Corporation's sales are to increase by 10% from $4.75 million in 2016 to 5.225$…
A: Answer:- External financing meaning:- Any kind of business investment which is obtained from…
Q: (Analyzing operating returns on assets) in 2015, Noble Corporation earned an operating profit margin…
A: Operating Profit margin = Operating Profit / Sales = 15% Asset Turnover ratio = Turnover/assets = 2…
Q: PRINCESS Trading Company presents the following data as of December 31, 2018. Percent to sales…
A: Additional Fund Needed: Greater funds necessary (AFN) refers to the amount of money a corporation…
Q: At year-end 2015, Wallace Landscaping’s total assets were $1.9 million and its accounts payable were…
A: To meet the business financial needs and operate the business, companies raise the funds from…
Q: (12-1) Broussard Skateboard's sales are expected to increase by 15% from $8 million in2013 to $9.2…
A: Hello. Since your question has multiple parts, we will solve the first question for you. If you want…
Q: At this point (at the end of 2013), a company's weighted average capital cost (WACC) is 12%, and its…
A: Cash flows method help in determining the corporate value and the debt amount is to be deducted from…
Q: Payne Products had $1.6 million in sales revenues in the most recent year and expects sales growth…
A: Information in question: Sales last year = $ 1.6 millions Projected Sales this year =…
Q: Broussard Skateboard's sales are expected to increase by 15% from $8 million in 2013 to $9.2 million…
A: Dividend Payout ratio - it is the part of the net income of a firm that is paid to its stockholders…
Q: Reima Inc. 2016 income statement is presented below. Sales P3,500,00 Operating Costs 2,500,000…
A: Projected Net Income is shown as below
Q: The Booth Company's sales are forecasted to double from $1,000 in 2016 to $2,000 in 2017. Here is…
A: Computation of the additional fund needed is shown: Hence, the additional funds needed by the Booth…
Q: Edwards Industries has $320 million in sales. The companyexpects that its sales will increase 12%…
A: Sales Forecast: Sales forecast is the important point that arises while making the future plans. The…
Q: The Booth Company's sales are forecasted to double from $1,000 in 2010 to $2,000 in 2011. Here is…
A: AFN is additional funds needed in business for fulfilling business requirements and conditions.
Q: Additional Funds Needed The Booth Company's sales are forecasted to double from $1,000 in 2016 to…
A: Fixed assets were used at 50% capacity. So, at 50% capacity of fixed assets, sales is $1,000 So, at…
Q: Central Bank has the following information (in $million). 2017 ($ million) 2018 ($ million)…
A: The ratios from one period to another can be compared to identify the trends in the ratios.
Q: Broussard Skateboard's sales are expected to increase by 15% from $8 million in 2016 to $9.2 million…
A: Since there is more than 1 question, according to our guidelines, we will answer the first one.…
Q: Krogen Grocer’s 2016 financial statements show net income of $1,680 million, sales of $153,466…
A: Ratio analysis means where different ratio of various years of years companies has been compared and…
Q: Long-Term Financing Needed At year-end 2016, Wallace Landscaping’s total assets were $1.7 million,…
A: To find the total long term debt in 2016, we will use following expression Long term debt = Total…
Q: Quantitative Problem: Beasley Industries' sales are expected to increase from $4 million in 2017 to…
A: 1) According to AFN equation: AFN= Increase in total asset- increase in spontaneous Liability…
Q: Block, S., Hirt, G., & Danielsen, B. (2017). Foundations of Financial Management. New York, NY:…
A: Calculating of the expected retained profit for the next year. We have,Profit margin = 12 % of…
Q: In 2016, the Allen corporation had sales of $63 million, total assets of $44 million, and total…
A: Operating profit margin = 14% of sales = 14% of $63 million = $8,820,000 Now interest rate = 5.7%…
Q: Assume that today is December 31, 2015, and the following information applies to Vermeil Airlines:…
A: Free cash flow (FCF) refers to the cash available with the company after bearing all…
Q: 4. A firm had owner's capital of P150,000 in 2013 and P187,500 in 2013. The increase in owner's…
A: 4) Given that: 2013 Owners Capital = P150,000 and P187,500 Increase in owners Capital = (P187500 - P…
Q: The most recent financial statements for Crosby. Inc., follow. Sales for 2018 are projected to grow…
A: EFN = (A/S) x (Δ Sales) - (L/S) x (Δ Sales) - (PM x FS x (1-d))A= Assets last year, S= Sales last…
Q: In 2016, the Allen Corporation had sales of $62 million, total assets of $47 million, and total…
A: Given the following information: Sales: $62,000,000 Total assets: $47,000,000 Total liabilities:…
Q: Net Income for Company A is $200,000 in 2014, $300,000 in 2015, $400,000 in 2016, $500,000 in 2017,…
A: The dividend discount model (DDM) is a quantitative method used for predicting the worth} of a…
Q: Here is the condensed 2015 balance sheet for Skye Computer Company (in thousands of dollars):…
A: Assuming Face Value= 1000 Tax Rate = 35℅ Coupon Rate = 10℅ Value of debt = 1051.11 Time period = 7…
Q: The sales revenue of Kam Chan Limited for 2014 is $100 million. The CEO talked to the sales director…
A:
Q: Appalachian Registers, Inc. (ARI) has current sales of $50 million. Sales are expected to grow to…
A: Increase in sales: [ Expected increase – current sales]/ current sales [$70 million - $50 million]/…
Q: 50. At the end of 2015, Apple had cash and short-term investments of $41.60 billion, accounts…
A: Current ratio = Current assets / Current liabilities
Q: Net Income for Company A is $200,000 in 2014, $300,000 in 2015, $400,000 in 2016, $500,000 in 2017,…
A: In this we have to calculate present value of future value of cash flow.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 1 images
- A. Quantitative Problem: Beasley Industries' sales are expected to increase from $5 million in 2017 to $6 million in 2018, or by 20%. Its assets totaled $3 million at the end of 2017. Beasley is at full capacity, so its assets must grow in proportion to projected sales. At the end of 2017, current liabilities are $790,000, consisting of $140,000 of accounts payable, $400,000 of notes payable, and $250,000 of accrued liabilities. Its profit margin is forecasted to be 4%, and its dividend payout ratio is 60%. Using the AFN equation, forecast the additional funds Beasley will need for the coming year. Do not round intermediate calculations. B. What is Mitchell's Target fixed assets/Sales ratio as percent? C. If Mitchell's sales increase 50%, how large of an increase in fixed assets will the company need to meet its Target fixed assets/Sales ratio?Quantitative Problem: Beasley Industries' sales are expected to increase from $4 million in 2017 to $5 million in 2018, or by 25%. Its assets totaled $2 million at the end of 2017. Beasley is at full capacity, so its assets must grow in proportion to projected sales. At the end of 2017, current liabilities are $750,000, consisting of $120,000 of accounts payable, $350,000 of notes payable, and $280,000 of accrued liabilities. Its profit margin is forecasted to be 4%, and its dividend payout ratio is 70%. Using the AFN equation, forecast the additional funds Beasley will need for the coming year. Round your answer to the nearest dollar. Do not round intermediate calculations.$ The AFN equation assumes that ratios remain constant. However, firms are not always operating at full capacity so adjustments need to be made to the existing asset forecast. Excess capacity adjustments are changes made to the existing asset forecast because the firm is not operating at full capacity. For…Quantitative Problem: Beasley Industries' sales are expected to increase from $5 million in 2017 to $6 million in 2018, or by 20%. Its assets totaled $3 million at the end of 2017. Beasley is at full capacity, so its assets must grow in proportion to projected sales. At the end of 2017, current liabilities are $790,000, consisting of $140,000 of accounts payable, $400,000 of notes payable, and $250,000 of accrued liabilities. Its profit margin is forecasted to be 4%, and its dividend payout ratio is 60%. Using the AFN equation, forecast the additional funds Beasley will need for the coming year. Do not round intermediate calculations. Enter your answer in dollars. For example, an answer of $2 million should be entered as 2,000,000. Round your answer to the nearest dollar.
- Beasley Industries' sales are expected to increase from $5 million in 2017 to $6 million in 2018, or by 20%. Its assets totaled $3 million at the end of 2017. Beasley is at full capacity, so its assets must grow in proportion to projected sales. At the end of 2017, current liabilities are $780,000, consisting of $120,000 of accounts payable, $500,000 of notes payable, and $160,000 of accrued liabilities. Its profit margin is forecasted to be 4%, and its dividend payout ratio is 60%. Using the AFN equation, forecast the additional funds Beasley will need for the coming year. Round your answer to the nearest dollar. Do not round intermediate calculations.AFN EQUATION Carter Corporation’s sales are expected to increase from $5 million in 2015 to $6 million in 2016, or by 20%. Its assets totaled $3 million at the end of 2015. Carter is at full capacity, so its assets must grow in proportion to projected sales. At the end of 2015, current liabilities are $1 million, consisting of $250,000 of accounts payable, $500,000 of notes payable, and $250,000 of accrued liabilities. Its profit margin is forecasted to be 5%, and the forecasted retention ratio is 30%. Use the AFN equation toforecast the additional funds Carter will need for the coming year.1. Broussard Skateboard's sales are expected to increase by 15% from $8 million in 2016 to $9.2 million in 2017. Its assets totaled $5 million at the end of 2016. Broussard is already at full capacity, so its assets must grow at the same rate as projected sales. At the end of 2016, current liabilities were $1.4 million, consisting of $450,000 of accounts payable, $500,000 of notes payable, and $450,000 of accruals. The after-tax profit margin is forecasted to be 6%, and the forecasted payout ratio is 40%. Use the AFN equation to forecast Broussard's additional funds needed for the coming year. 2. Refer to question 1, what would be the additional funds needed if the company's year-end 2016 assets had been $7 million? Assume that all other numbers, including sales, are the same as in question 1 and that the company is operating at full capacity. Why is this AFN different from the one you found in question 1? Is the company's "capital intensity" ratio the same or different? 3. Refer to…
- The Booth Company's sales are forecasted to double from $1,000 in 2016 to $2,000 in 2017. Here is the December 31, 2016, balance sheet: Cash Accounts payable Accounts receivable Notes payable Inventories Accruals Net fixed assets Long-term debt Common stock Retained earnings Total liabilities and equity $50 150 50 400 100 250 Total assets $1000 $1000 Booth's fixed assets were used to only 50% of capacity during 2016, but its current assets were at their proper levels in relation to sales. All assets except fixed assets must increase at the same rate as sales, and fixed assets would also have to increase at the same rate if the current excess capacity did not exist. Booth's after-tax profit margin is forecasted to be 5% and its payout ratio to be 50%. What is Booth's additional funds needed (AFN) for the coming year? Round your answer to the nearest dollar. $ $ 100 200 200 500 360Carlsbad Corporation’s sales are expected to increase from $5 millionin 2018 to $6 million in 2019, or by 20%. Its assets totaled $3 million at the end of 2018.Carlsbad is at full capacity, so its assets must grow in proportion to projected sales. At theend of 2018, current liabilities are $1 million, consisting of $250,000 of accounts payable,$500,000 of notes payable, and $250,000 of accrued liabilities. Its profit margin is forecastedto be 3%, and the forecasted retention ratio is 30%. Use the AFN equation to forecast theadditional funds Carlsbad will need for the coming year.Paradise At Sea's sales are exptec to increase by 15% from $8 million in 2018 to $9.2 million in 2019. Its assets totaled $5 million at the end of 2018. The firm is already at full capacity, so its assets must grow at the ssame rate as projected sales. At the end of 2018, current liabilities were $1.4 million, consisting of $450,000 of accounts payable, $500,000 of notes payable, and $450,000 of accruals. The after-tax profit margin is forecasted to be 6%, and the forecasted payout ratio is 40%. Find the sustainable growth rate for this firm. Warnings: Make sure to only include spontaneous liabilities and be careful with switching between thousands and millions....I would recommend using all the "0"s when completing the work. Make sure to state your answer as a percenage with 2 decimals.
- Paradise At Sea's sales are exptec to increase by 15% from $8 million in 2018 to $9.2 million in 2019. Its assets totaled $5 million at the end of 2018. The firm is already at full capacity, so its assets must grow at the ssame rate as projected sales. At the end of 2018, current liabilities were $1.4 million, consisting of $450,000 of accounts payable, $500,000 of notes payable, and $450,000 of accruals. The after-tax profit margin is forecasted to be 6%, and the forecasted payout ratio is 40%. Use the AFN equation to forecast the firm's AFN for the coming year. Warnings: Make sure to only include spontaneous liabilities and be careful with switching between thousands and millions....I would recommend using all the "0"s when completing the work. Make sure to include the "0"s in your answer.Mayor company sales are expected to increase by 20% from $5 million in 2018 to $6 million in 2019. Its assets totaled $7 million at the end of 2018. Mayor is already at full capacity, so its assets must grow at the same rate as projected sales. At the end of 2018, current liabilities were $1.2 million, consisting of $500,000 of accounts payable, $300,000 of notes payable, and $400,000 of accruals. The after-tax profit margin is forecasted to be 5%, and the forecasted payout ratio is 60%. a. Use the AFN equation to forecast Mayor’s additional funds needed for the coming year.Suppose that Barone Corporation's sales are expected to increase from $5 million this year (year 0) to $6 million next year (year 1). Its assets totaled $2,500,000 in year 0. Barone is at full capacity, so its assets must grow in proportion to projected sales. At the end of year 0, current liabilities are $800,000, consisting of $200,000 of accounts payable, $400,000 of notes payable, and $200,000 of accrued liabilities. Barone's profit margin is forecasted to be 3.00% and the forecasted retention ratio is 25.00%. Barone seeks to forecast the additional funds needed using the AFN equation. Let A represent Barone's assets and So represent sales in year 0. Let AS represent the change in sales in from year 0 to year 1. According to the video, which of the following best represents the projected increase in assets as part of the AFN equation? -AS + AS × AS × So Using the formula from the video, the projected increase in assets, as part of the AFN equation, is