Simple balance sheet statement, Financial Accounting

Current analysis

You will need about $150,000 in start-up costs but you can only borrow half of that amount from your family's home equity (at 13% interest). You will have to borrow the rest of the needed capital from a local community bank at 10%. Suppose you decide to take out a 5 year loan. Here is the amortization schedule:

Date

Interest

Principal

Balance

Year 1

$13,904.46

$24,340.22

$125,659.78

Year 2

$11,355.72

$26,888.96

$98,770.83

Year 3

$8,540.10

$29,704.58

$69,066.24

Year 4

$5,429.64

$32,815.04

$36,251.20

Year 5

$1,993.48

$36,251.20

$0.00

 

Your estimated revenue per page of a medical record is 75 cents. The estimated processing cost per page is 20 cents

Marketing is expected to cost you $2,000 per year. So far, you only have two clients (two local hospitals) with combined annual discharges of 30,000. From your marketing efforts and word- of-mouth, you expect to gain 5,000 new discharges  each year over the next 5 years.

On average, you expect to release10 pages per discharge. You plan to pay yourself $85, 000 per year. You plan to hire a part-time clerk for every 15,000 discharges at $20,000 per year. You expect to pay $10,000 per year in equipment lease. For the next 5 years, your revenue and expenses  are expected to  increase by 3%, except the marketing costs (in other words, marketing will remain at $2,000 per year) Your tax rate is expected to stay at  35%

Questions 

1. What is your corporate cost of capital (CCC) on the day you start your business?

2. Construct a projected P&L statement in each year for next 5 years.

3. Construct a simple balance sheet statement in each year for next 5 years. Remember that Assets = Equity + Liabilities

4. Discuss about the Dupont equation of your company.

5.  What other financial measures can investors use to evaluate the profitability of your company?

Posted Date: 2/19/2013 8:17:06 AM | Location : United States







Related Discussions:- Simple balance sheet statement, Assignment Help, Ask Question on Simple balance sheet statement, Get Answer, Expert's Help, Simple balance sheet statement Discussions

Write discussion on Simple balance sheet statement
Your posts are moderated
Related Questions
Q. What is fair value in stock market? Fair value - Amount at which an asset (or liability) could be bought (or incurred) or sold (or settled) in a current transaction between

What is Acid-test ratio A measurement of the capability of a business to meet its short-term commitments. It is considered by dividing excluding stock, current assets, by curre

INTER-COMPANY TRANSACTIONS AND BALANCES As the associate company is not consolidated, care should be taken when there are trading transactions and inter-company balances between

The time t= 0 continuously compounded term structure of interest rates is given by R(0 , T) = 0. 05 - 0. 005 e - 0.10 T . Find the price of a Treasury bond with exactly 3

Accounting Policies These financial statements have been prepared under the historical cost basis of accounting which is modified to accommodate the revaluation of certain proper

Consider a worker who earns $8.00 per hour and has no other source of income.  Compare the following two transfer policies: i.  A negative income tax that sets the tax (per day)

Stock Rights - Stock rights are rights issued to stockholders of a CORPORATION which entitle them to purchase new shares of stock in the corporation for a stated price that is freq

Below given th einformation of the stock calculate the required return of the stock. Dividend = $4.50 every year Current sales price of stock = $ 79.85 per share Formul

There are two projects A and B. The initial capital outlay of A and B are Rs.1,35,000 and Rs.2,40,000 respectively. There will be no scrap value at the end of the life of both the

Question: You are a member of a large accounting firm which is responsible for preparing financial reports, including statements and notes to the accounts; and for advising sta