Starborn Company has just been established as a new company to manufacture furniture. The company expects to earn $1 million after-taxes during its first year. The company president has asked for a projected balance sheet based on ratios similar to the industry average. Assuming all sales are made on credit, calculations utilize a 365-day year, and final numbers are rounded to the nearest thousand, prepare a projected balance sheet for Starborn based on the following industry ratios: Current Ratio: 2:1 Quick Ratio: 1:1 Net Profit Margin: 10% Average Collection Period: 20 days Debt Ratio: 40% Total Asset Turnover Ratio: 2 times Current Liabilities/Stockholder's Equity: 20% Create your balance sheet based on the following format: Cash Total Current Liabilities Accounts Receivable Long-term Debt Inventory Total Debt Total Current Assets Stockholder's Equity Net Fixed Assets Total Liabilities and Stockholder's Equity Total Assets
Starborn Company has just been established as a new company to manufacture furniture. The company expects to earn $1 million after-taxes during its first year. The company president has asked for a projected balance sheet based on ratios similar to the industry average. Assuming all sales are made on credit, calculations utilize a 365-day year, and final numbers are rounded to the nearest thousand, prepare a projected balance sheet for Starborn based on the following industry ratios: Current Ratio: 2:1 Quick Ratio: 1:1 Net Profit Margin: 10% Average Collection Period: 20 days Debt Ratio: 40% Total Asset Turnover Ratio: 2 times Current Liabilities/Stockholder's Equity: 20% Create your balance sheet based on the following format: Cash Total Current Liabilities Accounts Receivable Long-term Debt Inventory Total Debt Total Current Assets Stockholder's Equity Net Fixed Assets Total Liabilities and Stockholder's Equity Total Assets
Chapter4: Financial Planning And Forecasting
Section: Chapter Questions
Problem 7P
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Starborn Company has just been established as a new company to manufacture furniture. The company expects to earn $1 million after-taxes during its first year. The company president has asked for a projected
Assuming all sales are made on credit, calculations utilize a 365-day year, and final numbers are rounded to the nearest thousand, prepare a projected balance sheet for Starborn based on the following industry ratios:
Quick Ratio: 1:1
Net Profit Margin: 10%
Average Collection Period: 20 days
Debt Ratio: 40%
Total Asset Turnover Ratio: 2 times
Current Liabilities/
Create your balance sheet based on the following format:
|
Cash |
Total Current Liabilities | ||
| Accounts Receivable | Long-term Debt | ||
| Inventory | Total Debt | ||
| Total Current Assets | Stockholder's Equity | ||
| Net Fixed Assets | Total Liabilities and Stockholder's Equity | ||
| Total Assets |
Transcribed Image Text:Problem 1:
Starborn Company has just been established as a new company to manufacture furniture. The company
expects to earn $1 million after-taxes during its first year. The company president has asked for a
projected balance sheet based on ratios similar to the industry average.
Assuming all sales are made on credit, calculations utilize a 365-day year, and final numbers are rounded
to the nearest thousand, prepare a projected balance sheet for Starborn based on the following industry
ratios:
Industry
Averages
Current Ratio
Quick Ratio
Net profit margin ratio
Average collection period
Debt ratio
Total asset turnover ratio
Current liabilities/stockholders' equity
2:1
1:1
10%
20 days
40%
2 times
20%
Create your projected balance sheet based on the following format:
Cash
Total current liabilities
Accounts receivable
Long-tem debt
Inventory
Total debt
Total current assets
Stockholders' equity
Net fixed assets
Total liabilities and stockholders' equity
Total assets
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