FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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- Suppose a company has had the historic sales figures shown below. What would be the forecast for next years sales using the average approach?arrow_forwardYour company has sales of $97,200 this year and cost of goods sold of $71,200. You forecast sales to increase to $113,100 next year. Using the percent of sales method, forecast next year's cost of goods sold.arrow_forwardUse the table for the question(s) below. FCF Forecast ($ million) Year Sales 1 270 12.5% 32.40 Less: Income Tax (37%) (6.48) Less Increase in NWC (12% of Change in Sales) 3,60 Free Cash Flow 22.32 Growth versus Prior Year EBIT (10% of Sales) 0 240 OA. $4.27 OB. $7.47 OC. $12.8 OD. $5.12 2 290 7.4% 34.80 (6.96) 2.40 25.44 ACCE 3 310 6.9% 37.20 (7.44) 2.40 27.36 Banco Industries expect sales to grow at a rapid rate over the next 3 years, but settle to an industry growth rate of 4% in year 4. The spreadsheet above shows a simplified pro forma for Banco Industries. Banco industries has a weighted average cost of capital of 10%, $30 million in cash, $60 million in debt, and 18 million shares outstanding. If Banco Industries can reduce its operating expenses so that EBIT becomes 12% of sales, by how much will its stock price increase? 4 325.5 5.0% 39.06 (7.81) 1.86 29.388arrow_forward
- The following table shows CLV for A company. What is the CLV of the first year (please round it up)? Profit per Annual Customer Annual Year CustomerRetention Accounts Discount Discount ($) Probability RemainingRate 0 1 50 2 70 3 ↑ 75 41 42 43 44 45 90% 87% 85% 100 90 78.3 66.5 0.1 0.1 Cumulative Discounted Cash Flow ($)0 0.1 Factor 0.91 0.83 0.75arrow_forwardUse the "percent of sales method" of preparing pro forma financial statements to determine the projection for next year's accounts receivable. Make the following assumptions: current year's sales are $55,750,000; current year's cost of goods sold is $25,350,000; sales are expected to rise by 25%, The firm's investment in accounts receivable in the current year is $12,600,000. The firm's marginal tax rate is 35%. What is the projection for next year's accounts receivable? $10,320,000 $11,345,000 O $15,750,000 $8,772,000arrow_forwardSuppose a firm has had the historical sales figures shown as follows. What would be the forecast for next year's sales using the average approach? Year 2017 2018 Sales $ 750,000 500,000 Multiple Choice O $695,000 $700,000 $750,000 $775.000 2019 $ 700,000 2020 $ 750,000 2021 $ 775,000arrow_forward
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