The financial statements of Eagle Sport Supply are shown in the table below. For simplicity, "Costs" include interest. Assume thatEagle's assets are proportional to its sales. Assume a growth rate of 30% in revenue, expenses, and assets in 2023. The tax rate willremain constant.Income StatementSalesCosts$ 4,5502,050Pretax incomeTaxes (at 30.0%)$ 2,500750Net income$ 1,750Balance Sheet, Year-End2022Net assets$ 6,6002021$ 6,300Total$ 6,600$ 6,300DebtEquityTotal2022$ 2,8003,8002021$ 2,7003,600$ 6,600$ 6,300a. Assume that the dividend payout ratio is fixed at 60% and the equity-to-asset ratio is fixed at two-thirds. What is the internalgrowth rate for 2023?b. What is the sustainable growth rate for 2023?Note: For all requirements, do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.a. Internal growth rateb. Sustainable growth rate%%

Name: The financial statements of Eagle Sport Supply are shown in the table
Uploaded: 2024-03-20T06:33:21.000Z
Channel: Bartleby
Description: The financial statements of Eagle Sport Supply are shown in the table below. For simplicity, "Costs" include interest. Assume thatEagle's assets are proportional to its sales. Assume a growth rate of 30% in revenue, expenses, and assets in 2023. The

SGR = IT is the maximum growth rate any company can obtain without resorting to any external…

Business

Finance

Income Statement Sales Costs Pretax income Taxes (at 30.0%) Net income $ 4,550 2,050 $2,500 750 $ 1,750 Balance Sheet, Year-End Net assets 2022 $ 6,600 2021 $6,300 2022 Total $ 6,600 $6,300 Debt Equity Total $ 2,800 3,800 2021 $ 2,700 $ 6,600 3,600 $6,300 a. Assume that the dividend payout ratio is fixed at 60% and the equity-to-asset ratio is fixed at two-thirds. What is the internal growth rate for 2023? b. What is the sustainable growth rate for 2023?

Income Statement Sales Costs Pretax income Taxes (at 30.0%) Net income $ 4,550 2,050 $2,500 750 $ 1,750 Balance Sheet, Year-End Net assets 2022 $ 6,600 2021 $6,300 2022 Total $ 6,600 $6,300 Debt Equity Total $ 2,800 3,800 2021 $ 2,700 $ 6,600 3,600 $6,300 a. Assume that the dividend payout ratio is fixed at 60% and the equity-to-asset ratio is fixed at two-thirds. What is the internal growth rate for 2023? b. What is the sustainable growth rate for 2023?

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter6: Accounting For Financial Management

Section: Chapter Questions

Problem 11P: The Berndt Corporation expects to have sales of 12 million. Costs other than depreciation are...

See similar textbooks

Similar questions

The financial statements of Eagle Sport Supply are shown in the table below. For simplicity, "Costs" include interest. Assume that Eagle's assets are proportional to its sales. Assume a growth rate of 30% in revenue, expenses, and assets in 2020. The tax rate will remain constant. Income Statement Sales Costs Pretax income Taxes (at 40.0%) Net income 2019 Net assets $5,400 Total $3,350 1,450 $1,900 760 $1,140 Balance Sheet, Year-End 2018 $5,100 $5,400 $5,100 2019 $2,200 3,200 Debt Equity Total $5,400 6.42 x % a. Assume that the dividend payout ratio is fixed at 50% and the equity-to-asset ratio is fixed. What is the internal growth rate for 2020? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) X Answer is complete but not entirely correct. Internal growth rate 2018 $2,100 3,000 $ 5,100 b. What is the sustainable growth rate for 2020? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal…
The financial statements of Eagle Sport Supply are shown in the table below. For simplicity, "Costs" include interest. Assume that Eagle's assets are proportional to its sales. Assume a growth rate of 30% in revenue, expenses, and assets in 2020. The tax rate will remain constant. Income Statement Sales Costs Pretax income Taxes (at 40.0%) Net income Net assets Total 2019 $5,400 $5,400 Internal growth rate $3,350 1,450 $1,900 760 $1,140 Balance Sheet, 2018 $5,100 Sustainable growth rate $ 5,100 Year-End % Debt Equity Total a. Assume that the dividend payout ratio is fixed at 50% and the equity-to-asset ratio is fixed. What is the internal growth rate for 2020? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) 2019 $ 2,200 3,200 $5,400 2018 $ 2,100 3,000 $ 5,100 b. What is the sustainable growth rate for 2020? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) %
ABC Enterprise would like to evaluate/analyze a potential investment.. Given the following:Investment amount - 450,000 (2022)Dividends / Revenue stream - 100,000 for the first year and an interval of 5,000 for the succeeding years Discount rate - 14%a. NPV for the perio 2023 through 2029;b. Total NPV using manual computation;c. Total NPV using the Excel function; andd. IRR rate.
The Berndt Corporation expects to have sales of 12 million. Costs other than depreciation are expected to be 75% of sales, and depreciation is expected to be 1.5 million. All sales revenues will be collected in cash, and costs other than depreciation must be paid for during the year. Berndts federal-plus-state tax rate is 40%. Berndt has no debt. a. Set up an income statement. What is Berndts expected net income? Its expected net cash flow? b. Suppose Congress changed the tax laws so that Berndts depreciation expenses doubled. No changes in operations occurred. What would happen to reported profit and to net cash flow? c. Now suppose that Congress changed the tax laws such that, instead of doubling Berndts depreciation, it was reduced by 50%. How would profit and net cash flow be affected? d. If this were your company, would you prefer Congress to cause your depreciation expense to be doubled or halved? Why?
Consider the following information that you propose to use to obtain an estimate of year 2004 EPS for the MacLog Company. Estimated Year 2019 Year 2020 GDP 11,000 Billion GDP growth 3.5% Sales per share $800 Operating profit margin 12% Depreciation/Fixed Assets 14% Fixed asset turnover 2 Interest rate 3.5% Total asset turnover 0.7 Debt/Total assets 45% Tax rate 36% In addition, a regression analysis indicates the following relationship between growth in sales per share for MacLog, and GDP growth is %Δ Sales per share = 0.015 + 0.75(%Δ GDP) Refer to Exhibit 9.6. Calculate the firm's level of Total Assets per share for the year 2020. a. $1,385.77 b. $1,113.58 c. $1,050.65 d. $1,065.67 e. $1,190.06
Some parts of the balance sheet and income statement of PaintsWorld Enterprises is given below. You know that the effective tax rate is 23.0% and the interest rate the company pays on its long-term debt is 11.0%. You also know that the outstanding debt has been constant over the past few years. 1.Find the leverage ratio in 2022: 2. Find the asset turnover for 2022:
A. Wally asks you to create an Income Statement for 2020 using the information below. 1. 2020 sales were 150% of last year’s sales2. Gross profit margin was 55%3. Operating profit margins were 15% 4. Interest expense fell to 7%, given a change in interest rates 5. The tax rate was 30% B. Based on the change in Income between 2020 and 2019, how would you say AndrewCo is doing?
Global Corp. expects sales to grow by 7% next year. Using the percent of sales method and the data provided in the given tables LOADING... , forecast: a. Costs except depreciation b. Depreciation c. Net income d. Cash e. Accounts receivable f. Inventory g. Property, plant, and equipment h. Accounts payable (Note: Interest expense will not change with a change in sales. Tax rate is 26%.) The Tax Cuts and Jobs Act of 2017 temporarily allows 100% bonus depreciation (effectively expensing capital expenditures). However, we will still include depreciation forecasting in this chapter and in these problems in anticipation of the return of standard depreciation practices during your career. Income Statement Net Sales 185.3Costs Except Depreciation -175.4EBITDA 9.9Depreciation and Amortization -1.2EBIT 8.7Interest Income (expense) -7.7Pretax Income 1Taxes (26%) -0.3Net Income 0.7 Balance Sheet Assets Cash 23.4Accounts…
If Going Merry Inc. has a net income of P 200,000 and a net sales of P 5,050,000 during 2020; and a net income of P 225,000 and net sales of P 7,000,000 for the year 2021. What are the return on sales of Going Merry Inc. for the year 2020 and 2021?Choices (Format): Year - %; Year-% A. 2020 - 3.96%; 2021 - 3.21% B. 2020 - 3.21%; 2021 - 3.96% C. 2020 - 2.86%; 2021 - 4.46 % D. 2020 - 4.46%; 2020 - 2.86 %
ABC Enterprise would like to evaluate/analyze an investment proposal. Given the following:Investment amount - 450,000 (2022)Dividends / Revenue stream - 100,000 for the first year and an interval of 5,000 for the succeeding years Discount rate - 14%a. NPV for the period 2023 through 2029;b. Total NPV using manual computation;c. Total NPV using the Excel function; andd. IRR rate.EXCEL COMPUTATION AND FORMULA
Hal's Ice Cream Stands $ Thousands Assets Cash and cash equivalents Accounts receivable Inventories Total Current Assets Equipment Less accumulated depreciation Land Holdings Total Assets Liabilities & Shareholders' Equity Accounts Payable Short-term Debt Total Current Liabilities Long-Term Debt Total Liabilities Shareholders' Equity Liabilities & Shareholders' Equity Hal's Income Statement for the Year Ending 12/31/2021 ($ 000s except for earnings per share) Sales Cost of Goods Sold Payroll and employee benefits Gross Operating Profit Selling, general and administrative expenses Income from Operations Interest expense Income taxes Net Income Earnings per share of common stock ($) 2021 $100 50 75 $225 300 (5) 15 $535 200 50 250 100 350 ??? $535 $500 100 200 200 100 100 5 20 $75 $0.25
Supposing that the 2022 sales are projected to increase by 25% over the year 2021 sales and that there is proportional relationship between sales to operating costs, interest expenses, current assets and spontaneous liabilities. The company has been operating at full capacity and planned to maintain the dividend ratio and profit margin position of the previous year.Required i. Using the Percentage of Sales proforma method, compute the additional funds needed (AFN), assuming that the company was operating at full capacity in the year 2021. ii. Using the Formula method, compute the additional funds needed, assuming that the company was operating at full capacity in the year 2021.