Reference no: EM131447173
Financing Deficit Stevens Textile Corporation's 2016 financial statements are shown below: Balance Sheet as of December 31, 2016 (Thousands of Dollars) Cash $ 1,080 Accounts payable $ 4,320 Receivables 6,480 Accruals 2,880 Inventories 9,000 Line of credit 0 Total current assets $16,560 Notes payable 2,100 Net fixed assets 12,600 Total current liabilities $ 9,300 Mortgage bonds 3,500 Common stock 3,500 Retained earnings 12,860 Total assets $29,160 Total liabilities and equity $29,160 Income Statement for December 31, 2016 (Thousands of Dollars) Sales $36,000 Operating costs 32,440 Earnings before interest and taxes $ 3,560 Interest 460 Pre-tax earnings $ 3,100 Taxes (40%) 1,240 Net income $ 1,860 Dividends (45%) $ 837 Addition to retained earnings $ 1,023 Suppose 2017 sales are projected to increase by 20% over 2016 sales. Use the forecasted financial statement method to forecast a balance sheet and income statement for December 31, 2017. The interest rate on all debt is 12%, and cash earns no interest income. Assume that all additional debt in the form of a line of credit is added at the end of the year, which means that you should base the forecasted interest expense on the balance of debt at the beginning of the year. Use the forecasted income statement to determine the addition to retained earnings. Assume that the company was operating at full capacity in 2016, that it cannot sell off any of its fixed assets, and that any required financing will be borrowed as notes payable. Also, assume that assets, spontaneous liabilities, and operating costs are expected to increase by the same percentage as sales. Determine the additional funds needed. Round your answers to the nearest dollar. Do not round intermediate calculations. Total assets $ AFN $ What is the resulting total forecasted amount of the line of credit? Round your answer to the nearest dollar. Do not round intermediate calculations. Line of credit $ In your answers to Parts a and b, you should not have charged any interest on the additional debt added during 2017 because it was assumed that the new debt was added at the end of the year. But now suppose that the new debt is added throughout the year. Don't do any calculations, but how would this change the answers to parts a and b? If debt is added throughout the year rather than only at the end of the year, interest expense will be than in the projections of part a. This would cause net income to be , the addition to retained earnings to be , and the AFN to be . Thus, you would have to new debt.
Future of healthcare delivery
: In a two page paper, discuss the impact an aging society will have on the future of healthcare delivery. Be sure to address if there will be enough staff, physical resources, etc to meet demand.
|
Differentiate between net cash flow and accounting profit
: Differentiate between net cash flow and accounting profit. What types of questions does the statement of cash flows answer?
|
What are two challenges of independent reading practices
: edu 371- What are at least two benefits of independent reading practices? What are at least two challenges of independent reading practices? What is your own philosophy about providing students independent reading time in schools?
|
Creating success by anticipating obstacles
: An important part of your course-long project(remolding the dining area) is avoiding pitfalls that can derail any project. Following is an interesting video from ProjectManger.com (Links to an external site.) that follows the "Top 10 Reasons for Pr..
|
What is resulting total forecasted amount of line of credit
: Financing Deficit Stevens Textile Corporation's 2016 financial statements are shown below: Balance Sheet as of December 31, 2016 (Thousands of Dollars) Cash $ 1,080 Accounts payable $ 4,320 Receivables 6,480 Accruals 2,880 Inventories 9,000 Line of c..
|
Focus on training of basic literacy skills
: In today's environment, why is it important for organizations to focus on training of basic literacy skills?
|
Explain the six basic principles of persuasion
: Explain the basics of inspirational and emotion-provoking communication.Explain the key features of a power-oriented linguistic style.Explain the six basic principles of persuasion.Evaluate basic approaches to resolving conflict and negotiating.
|
Profitable networking opportunities
: A Virginia-based entrepreneur believes that joining Kinloch Golf Club will allow for profitable networking opportunities, thus improving her business. But she wonders if it is worth the costs of joining. Ignore any utility she receives from the enjoy..
|
Conduct an organizational training needs analysis
: Using publicly available information and data, propose business goals for comfort that will address the challenges the company and industry as a whole is facing. (Detailed information and data about the company and industry, business goals are bas..
|