Outlaws is a general goods retail chain in the High Plains region. Forecast the financial statements for Outlaws for Year 7. Use the percent of sales method based on Year 6 and the assumptions listed below
Please note the ratios provided in the table which are useful for making the forecast.
Sales growth of 5.5%. The cost of debt is 6.25%. The tax rate is 35%. The depreciation rate is 6%. CAPEX is $300 Million. The following accounts are constant: Goodwill and common stock. Long term debt is the PLUG variable. No dividends.
Forecast the financial statements for Outlaws. What are the additional funds needed (AFN) in Year 7? The AFN is the change in the plug account from Year 6 to Year 7.
Year 6 Ratios Forecast
Revenue $29,210 $30,817
COGS 22,152 0.758370
SG&A 5,245 0.179562
Dep. Exp. 621
EBIT 1,192
Int. Exp. 277
EBT 915
Inc Taxes 288
Net Income $627
ASSETS Year 6 Ratios Forecast
Total Current Assets $4,385 0.150120
PP&E 9,637
Goodwill 678 678
Total Assets $14,700
LIABILITIES AND OWNER'S EQUITY
Total Current Liabilities 3,651 0.124991
Long Term Debt 4,208
Total Liabilities $7,859
Owner's Equity
Common Stock 1,192 1,192
Retained Earnings 5,089
Total Owner's Equity 6,281
Total Liabilities & Owner's Equity $14,700
A) -$381 million
B) -$290 million
C) -$91 million
D) $127 million
E) $189 million
A
You might also like to view...
Lassen Corporation issued ten-year term bonds on January 1, 2010, with a face value of $800,000 . The face interest rate is 6 percent and interest is payable semi-annually on June 30 and December 31 . The bonds were issued for $690,960 to yield an effective annual rate of 8 percent. The effective interest method of amortization is to be used. The entry to record the bond interest expense on the
first interest payment date is: (Round answer to the nearest dollar.) a. Bond Interest Expense 24,000 Cash 24,000 b. Bond Interest Expense 27,638 Unamortized Bond Discount 3,638 Cash 24,000 c. Bond Interest Expense 27,638 Cash 27,638 d. Bond Interest Expense 27,638 Unamortized Bond Discount 27,638
Parol Evidence. A 1965 bargaining agreement between employees and Wheelabrator Corp clearly stated that the company would pay the cost of health insurance for employees who had retired prior to 1959. Later bargaining agreements, the last of which
expired in 1988 when the plant at which the employees worked was closed, also indicated that once employees reach the age of sixty-five, Wheelabrator would pay for their health insurance and that when they die, their spouses would continue to receive supplemental health benefits at the company's cost. Wheelabrator withdrew the health benefits of retired employees in 1988, when it closed its plant and the last agreement expired. Kenneth Bidlack and other retired employees sued the company to have their health benefits reinstated. The employees asserted that the agreements meant that they would be granted benefits for life. Wheelabrator contended that the agreements granted benefits only for years—during the duration of the agreements. The court was left to decide whether extrinsic evidence (including letters from the company to retirees indicating that the company would pay the cost of the health insurance throughout the retirees' lives) was admissible to clarify terms of the contract. Should the court allow the employees to introduce extrinsic evidence to justify their claim? Discuss fully.
ERP systems today have evolved to the more flexible mainframe and centralized legacy application architecture
Indicate whether the statement is true or false
Show the INSERT INTO statements for the table CLIENT
What will be an ideal response?