Financial Reporting, Financial Statement Analysis and Valuation
8th Edition
ISBN: 9781285190907
Author: James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher: Cengage Learning
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Chapter 14, Problem 1LIC
To determine
Assume the long run growth of Company S beginning in the year +6 will be 1% instead of 3%. With a growth rate of 1%, year +6 comprehensive income will be $2,900 million. Compute the price differential of S Company at the end of 2012.
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Suppose a firm has had the following historic sales figures.
Year:
2016
Sales $1,420,000
2017
$1,720,000
Next year's sales
2018
2019
2020
$1,600,000 $2,010,000 $1,770,000
What would be the forecast for next year's sales using FORECAST.ETS to estimate a trend?
Note: Round your answer to the nearest whole dollar.
27
ACME Inc. has the following ratios: A0/S0- 1.3; LO/SO-0.40; profit margin-0.14; and the dividend
payout ratio- .32, or 32%. Sales last year were $85 million. Assuming that these ratios will remain
constant, use the AFN equation to determine the firm's self-supporting growth rate-in other words, the
maximum growth rate ACME can achieve without having to employ non-spontaneous external funds.
(Equation 9-2, which is 9-1, solving for g)
Suppose that in 2023,
Global launched an aggressive marketing campaign that boosted 2023 sales further by 15.8%. However, their operating
margin fell from 5.76% to 3.98%. Suppose that they had no other income, interest expenses were unchanged, and taxes
were the same percentage of pretax income (26%) as in 2022.
Global Corp. initially projected the 2023 income statement shown in the following table:
a. What was Global's EBIT in 2023?
b. What was Global's net income in 2023?
c. If Global's P/E ratio (18.0) and number of shares outstanding (3.6 million) remained unchanged, what was Global's
share price in 2023?
Chapter 14 Solutions
Financial Reporting, Financial Statement Analysis and Valuation
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