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 2023. The tax rate will remain constant. Income Statement $2,750 1,150 $1,600 480 Sales Costs Pretax income Taxes (at 30.0%) Net income $ 1,120 Balance Sheet, Year-End Net assets 2022 2021 $ 4,800 $4,500 2022 Total $ 4,800 $4,500 Debt Equity Total 2021 $1,900 $ 1,800 2,900 2,700 $ 4,800 $4,500 a. Assume that the dividend payout ratio is fixed at 50% 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?
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- 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 2023. The tax rate will remain constant. Income Statement Sales Costs $ 4,550 2,050 Pretax income Taxes (at 30.0%) $ 2,500 750 Net income $ 1,750 Balance Sheet, Year-End 2022 Net assets $ 6,600 2021 $ 6,300 Total $ 6,600 $ 6,300 Debt Equity Total 2022 $ 2,800 3,800 2021 $ 2,700 3,600 $ 6,600 $ 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? Note: For all requirements, do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. a. Internal growth rate b. Sustainable growth rate % %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.) %
- Mee Kolok Berhad had developed the following income statement for its operations ended 30 June 2022. Sales (-) Variable Cost (-) Fixed Costs Earnings Before Interest and Taxes Interest Expense Earnings Before Tax Taxes @ 28% Net Income RM 384,000 230,400 96,000 57,600 19,200 38,400 10,752 27,648 Q1) Current Earning per Share (EPS) is RM3.60. Calculate the new EPS for Mee Kolok Berhad Berhad next year if sales increase by 15%.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. $1,190.06Consider the following income statement for Jordan Corporation:Jordan CorporationIncome Statement Sales₱ 38,000 Costs18,400 Taxable Income₱19,600 Taxes (34%)6,664 Net Income₱12,936 Dividends₱5,200 Addition to Retained Earnings7,736 A 25% growth rate in sales is projected. Prepare a pro forma income statement assuming costs vary with sales and the dividend payout ratio is constant. What is the projected addition to retained earnings?
- 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?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.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?
- 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…DEF Corporation had the following information for the year 2022: Net sales: $500,000 Gross profit margin: 40% Operating expenses: $200,000 Income tax rate: 30% Calculate the net income for the year.Use the following information for Smith Brothers, Inc: EBIT / Revenue 15.00% Government Tax Rate 35.00% Revenue / Assets 1.80 times Current Ratio 2.40 times EBT / EBIT 0.80 times Assets / Equity 1.90 times Smith Brothers, Inc.'s return on assets (ROA) is closest to: A. 14.04%. B. 14.82%. C. 24.71%. D. 26.68%.