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Answered: - reach out to me please niawhite007 gmail . Suggest two reasonable


reach out to me please niawhite007 gmail


. Suggest two reasonable business recommendations to your friend.? Show your friend how these recommendations would effect the cash budget.? Use a text box to explain your changes.? Name the worksheet "Recommendations"


Income Satement

 

Sales

 

Costs

 

Net Income

 


 

Sales Increase

 


 

Balance Sheet

 

Assets

 

21,900 Debt

 

Equity

 

Total

 

21,900 Total

 

Next Year Projected Sales

 

8449

 


 

7,100

 

4,370

 

2,730

 


 

9,400

 

12,500

 

21900

 


 

0.19

 


 

Increase statement by 19%

 

Sales

 

8449.00

 

Cost

 

5200.30

 

Net Income

 

3248.70

 


 

Assets

 

Total

 


 

26,061 Debt

 

Equity

 

26061.00 Total

 


 

9,400

 

15748.70

 

25148.70

 


 

If no dividens are paid the equity amount will increase by the net income

 

Equity

 

15748.70

 

EFN= Total assets-Total Liabilites and equity

 

EFN

 

912.30

 


 

Income Satement

 

Sales

 

Costs

 

Taxable Income

 

Taxes

 

Net Income

 


 

Balance Sheet

 

Current Asset

 

10,400 Debt

 

Fixed Assets

 

28,700 Equity

 

Total

 

39,150 Total

 


 

17,500

 

11,800

 

5,700

 

40%

 

3,420

 


 

17,500

 

21,650

 

39,150

 


 

To calculate the internal groth rate we first need to calculate ROA

 

ROA=NI/TA

 

ROA

 

8.74%

 

0.0874

 

The playback ratio b is one minus the payout ratio

 

30

 

0.70

 

External growth rate equation

 

Internal Growth rate

 

0.06516691

 

0.9126

 

0.63882

 

10.20%

 

0.06516691

 

Income Satement

 

Sales

 

Costs

 

Taxable Income

 

Taxes

 

Net Income

 


 

17,500

 

11,800

 

5,700

 

40%

 

3,420

 


 

Balance Sheet

 

Current Asset

 

10,400 Debt

 

Fixed Assets

 

28,750 Equity

 

Total

 

39,150 Total

 

2280

 


 

Caculate ROE

 

NI/TE

 

ROE

 

0.15796767

 

The playback ratio b is one minus the payout ratio

 

Plowback ratio

 

0.7

 

Sustainable growth rate = (ROE ? b ) / [1 ? (ROE ? b ))

 

0.12432489

 


 

0.3

 


 

17,500

 

21,650

 

39,150

 


 

Income Satement

 

Sales

 

49,000

 

Costs

 

37,500

 

Taxable Inco

 

11,500

 

Taxes

 

34%

 

Net Income

 

7,590

 

ROE

 

NI/TE

 

ROE

 

0.13553571

 

Ployback ratio 1-payout ratio

 

Plowback

 

0.7

 


 

Balance Sheet

 

Current Asset

 

21,000 Long Term Debt

 

Fixed Assets

 

86,000 Equity

 

Total

 

107,000 Total

 

3910

 


 

0.3

 


 

Sustainable growth rate = (ROE ? b ) / [1 ? (ROE ? b )]

 

Sus Growth 0.10481978

 

Max increase in sales

 

5136.16904

 


 

51,000

 

56,000

 

107,000

 


 

Sales

 

Cost

 

Taxable Income

 

Taxes

 

Net Income

 

Dividens

 

Addition to retained earnings

 

Current Assets

 

Cash

 

Accounts recievable

 

Inventory

 

Total

 

Fixed Assets

 

Net Plant Equipment

 

Total Assets

 


 

47,000

 

31,300

 

15,700

 

5,495

 

10,205

 

2,500

 

7,705

 


 

2,950

 

4,100

 

6,400

 

13,450

 


 

41,300

 

54,750

 


 

0.35

 


 

Current Liabilities

 

6.28% Account Payable

 

2,400

 

8.72% Notes Payable

 

5,400

 

13.62% Total

 

7,800

 

28.62% Long Term Debt

 

28,000

 

Common stock and Paid in Surplus

 

Retained Earn

 

3,950

 

87.87% Total

 

18,950

 

116.49% Total Liabilities

 

54,750

 


 

0.05106383

 


 

15,000

 


 

ROE

 

Payot Ratio

 

Plow Back

 


 

0.14

 

0.3

 

0.7

 


 

Sustainable Growth Rate

 


 

Operating Capacity

 

Sales

 


 

0.10864745

 


 

0.92

 

640,000

 


 

To determine full capacity sales, we divide the current sales by the capacity the company is currently using

 


 

Full Cap Sale 695652.174

 

The maximum sales growth is the full capacity sales divided by the current sales

 


 

Max Sales

 

Fixed Assets

 

Projected Gr

 


 

8.70%

 

490,000

 

730,000

 


 

Fixed assets / Full capacity sales

 


 

New Level Fixed Assets

 


 

0.704375

 


 

calculate the total dollar amount of fixed assets needed at the new sales figure

 


 

Total Fixed Assets

 


 

514193.75

 


 

new fixed assets necessary is the total fixed assets at the new sales figure minus the current level of fixed assts

 


 

New Fixed Assets

 


 

24,193.750

 


 

Internal Growth Rate

 

Dividene Payout Ratio

 

Promit Margin

 


 

0.065 %

 

0.25 %

 

0.06 %

 


 

ROA = PM(TAT)

 


 

Plow back Ratio b

 


 

0.75

 


 

Using the internal growth rate equation to find the ROA

 

Internal growth rate = (ROA ? b) / [1 ? (ROA ? b)]

 


 

.065=(ROA(.75)/(1-ROA(.75))

 

ROA

 

0.0813771518

 

TAT

 

ROA = PM(TAT)

 

TAT

 

8.14=.6(tat)

 

TAT

 

1.3562858633

 


 

0.79875 twostep

 


 

Sales

 

Net Income

 

Dividens

 

Total Debt

 

Total Equity

 


 

165,000

 

14,800

 

9,300

 

68,000

 

51,000

 


 

To calculate the sustainable growth rate, we first must calculate the retention ratio and ROE. The retention ratio i

 

b

 

0.37162162

 

ROE

 

0.29019608

 

Sustainable growth rate = (ROE ? b) / [1 ? (ROE ? b)]

 


 

Sus Growth

 


 

0.12087912

 


 

New TA

 


 

1.12087912

 


 

133384.615

 


 

New TD = [D / (D + E)](TA)

 


 

New TD

 

76219.7802

 

Additonal Borrowing=New TD-TD

 

Add Borrwoin

 

8,220

 

ROA

 


 

0.12436975

 


 

Internal growth rate = (ROA ? b) / [1 ? (ROA ? b)]

 


 

InternalGR

 


 

Equity Beg

 

TA end

 

Net Income

 

Dividens

 


 

0.04845815

 


 

145,000

 

275,000

 

26,000

 

5,500

 


 

Dividens

 

Net Income

 

End Year Ass

 

Payout Ratio

 

Payout Ratio

 

ROA

 

ROA

 

IGR

 

IGR

 


 

5,500

 

26,000

 

275,000

 

Dividens/Net Income

 

0.21153846

 

Net Income/End of year assets

 

0.09454545

 

ROAxretention ratio/1-ROA*retention ratio

 

8.06% 0.07454545 two setp process

 

0.92545455

 


 

Beginning year assets = end of year assets-(Net Income-Dividend)

 

BYA

 

254,500

 

IGR

 

Net Income/beginning of year asssets*(1-Payout ratio)

 

IGR/beg period

 

8.06%

 

IGR end period netincome/end of year assets*(1-payout ratio)

 

IGR/end peri

 

7.45%

 


 

743,000

 

578,000

 

15,200

 


 

0.2 %

 

891600

 

693600

 

18240

 


 

Earnings before interest and taxes

 

Interest paid

 


 

149,800

 

11,200

 


 

179760

 

11,200

 


 

Taxable income

 

Taxes (35%)

 


 

138,600

 

48,510

 


 

168,560

 

58996

 


 

90,090

 


 

109,564

 


 

Sales

 

Costs

 

Other expenses

 


 

Net income

 

Dividends

 

Addition to retained earnings

 

Dividends

 

Add2RE

 

NewRT

 


 

0.35

 


 

27,027

 

63,063

 


 

32869.2

 

76,695

 

223,415

 


 

Assets

 

Current assets

 

Cash

 

$

 

Accounts receivable

 


 

Inventory

 


 

Liabilities and Owners? Equity

 

0.2 Current liabilities

 

20,240

 

24288 Accounts p$

 

32,560

 

39072 Notes payable

 


 

69,520

 


 

Total

 

$

 

Fixed assets

 

Net plant and e $

 


 

122,320

 

330,400

 


 

Retained earnings

 


 

83424

 


 

Total

 


 

$

 


 

146784 Long-term d$

 

Owners? equity

 

396480 Common st$

 


 

54,400

 

13,600

 


 

65,280

 

13,600

 


 

68,000

 


 

78,880

 


 

126,000

 


 

126,000

 


 

112,000

 


 

112,000

 


 

146,720

 


 

223,415

 


 

Total

 


 

Total assets

 


 

$

 


 

452,720

 


 

$

 


 

258,720

 


 

335,415

 


 

543,264 Total liabili $

 


 

452,720

 


 

540,295

 


 

Full capacity sales = $sales / 0.80

 

Full Cap Sales

 

928750

 

Full capacity ratio = Fixed assets / Full capacity sales

 

Full Cap Ratio

 

0.35574697

 

Total Fix Ass

 

317184

 

EFN

 

-76,327

 

EFN

 

2,969

 


 

Debt Equity Ratio

 

0.74984539

 

Projected Liability Own Eq

 

586924.042

 

Excess Debt

 

43,660.04

 

New total dept

 

251509.242

 

Spontaneous increase AP

 

10880

 

EFN

 

46,629

 


 

0.8

 


 

743,000

 

578,000

 

15,200

 


 

0.2 %

 

891600

 

693600

 

18240

 


 

0.15

 

854450

 

664700

 

17480

 


 

0.25

 

928750

 

722500

 

19000

 


 

Earnings before interest and taxes

 

Interest paid

 


 

149,800

 

11,200

 


 

179760

 

11,200

 


 

172270

 

11,200

 


 

187250

 

11,200

 


 

Taxable income

 

Taxes (35%)

 


 

138,600

 

48,510

 


 

168,560

 

58996

 


 

161,070

 

56374.5

 


 

176,050

 

61617.5

 


 

90,090

 


 

109,564

 


 

104,696

 


 

114,433

 


 

Sales

 

Costs

 

Other expenses

 


 

0.77792732

 


 

Net income

 

Dividends

 

Addition to retained earn

 

0.2

 

Dividends

 

32869.2

 

Add2RE

 

76,695

 

NewRT

 

223,415

 

Assets

 

Current assets

 

Cash

 

$

 

Accounts receivable

 


 

Inventory

 


 

Total

 

$

 

Fixed assets

 

Net plant $

 

Retained earnings

 


 

27,027

 

63,063

 

0.15

 

31408.65

 

73,287

 


 

0.25

 

34329.75

 

80,103

 


 

Liabilities and Owners? Equity

 

0.2 Current liabilities

 

20,240

 

24288 Accounts p$

 

32,560

 

39072 Notes payable

 


 

69,520

 


 

122,320

 

330,400

 


 

Total

 


 

$

 


 

146784 Long-term d$

 

Owners? equity

 

396480 Common st$

 


 

54,400

 

13,600

 


 

65,280

 

13,600

 


 

0.15

 

23276

 

37444

 


 

68,000

 


 

78,880

 


 

79948

 


 

86900

 


 

76,160

 


 

81,600

 


 

126,000

 


 

126,000

 


 

140668

 


 

152900

 


 

126,000

 


 

126,000

 


 

112,000

 


 

112,000

 


 

379960

 


 

413000

 


 

112,000

 


 

112,000

 


 

223,415

 


 

83424

 


 

220,007

 


 

226,823

 


 

332,007

 


 

338,823

 


 

534,167

 


 

546,423

 


 

146,720

 


 

Total

 


 

Total assets $

 


 

0.35

 


 

452,720

 


 

$

 


 

258,720

 


 

452,720

 


 

540,295

 


 

0.15

 

62560

 

13,600

 


 

0.25

 

68000

 

13,600

 


 

335,415

 


 

543,264 Total liabili $

 


 

0.25

 

25300

 

40700

 


 

Full capacity sales = $sales / 0.80

 

0.8

 

Full Cap Sales

 

928750

 

Full capacity ratio = Fixed assets / Full capacity sales

 

Full Cap Ratio 0.35574697

 

Total Fix Ass

 

317184

 

EFN

 

-76,327

 

EFN

 

2,969

 

0.2

 

0.15

 

Total Fix Ass

 

303968

 

EFN

 

-75,992

 

EFN

 

-13,539

 

0.25

 

Total Fix Ass

 

330400

 

EFN

 

EFN

 

19,477

 


 

520,628

 


 

565,900

 


 

Income State Balance Sheet

 

Sales

 

32,000 Assets

 

Costs

 

24,400

 


 

Net income

 


 

7,600

 


 

Total

 


 

Income State Balance Sheet

 

Sales

 

36,800 Assets

 

Costs

 

28,060

 


 

Net income

 

Equity

 

Equity Increa

 

Dividend

 


 

8,740

 

22,425

 

2,925

 

5,815

 


 

Total

 


 

0.15

 

25,300 Debt

 

Equity

 


 

5,800

 

19,500

 


 

25,300

 


 

Total

 


 

25,300

 


 

29,095 Debt

 

Equity

 


 

6,670

 

22,425

 


 

29,095

 


 

29,095

 


 

Total

 


 

Income Statement

 

Sales

 

Costs

 


 

47,000

 

31,300

 


 

Taxable income

 

Taxes (35%)

 


 

15,700

 

5,495

 


 

Net income

 


 

10,205

 


 

Dividends

 

Addition to retaine

 


 

2,500

 

7,705

 


 

Income Statement

 

Sales

 

Costs

 


 

56,400

 

37,560

 


 

Taxable income

 

Taxes (35%)

 


 

18,840

 

6,594

 


 

Net income

 


 

12,246

 


 

Dividends

 

Addition to retaine

 


 

3,000

 

9,246

 


 

0.35

 


 

ROA

 

0.07

 

Payout Raito

 

0.25

 

b

 

0.75

 

nternal growth rate = (ROA ? b) / [1 ? (ROA ? b)]

 

IGR

 

0.05540897

 

Profit Margin

 

TAT

 

SGR

 

DER

 


 

0.058

 

1.55

 

0.12

 

0.4

 


 

ROE = (PM)(TAT)(EM)

 


 

ROE

 


 

0.0523871

 


 

5.24

 


 

Dividends Payout Raito

 

1-Sustainable Grwoth Rate /1(Sustaiantable growth rate )*ROE

 

-1.04521464

 

two step

 

DPR

 

0.05867355

 


 

743,000

 

578,000

 

15,200

 


 

0.2 %

 

891600

 

693600

 

18240

 


 

0.15

 

854450

 

664700

 

17480

 


 

0.25

 

928750

 

722500

 

19000

 


 

Earnings before interest and taxes

 

Interest paid

 


 

149,800

 

11,200

 


 

179760

 

11,200

 


 

172270

 

11,200

 


 

187250

 

11,200

 


 

Taxable income

 

Taxes (35%)

 


 

138,600

 

48,510

 


 

168,560

 

58996

 


 

161,070

 

56374.5

 


 

176,050

 

61617.5

 


 

90,090

 


 

109,564

 


 

104,696

 


 

114,433

 


 

54,400

 

13,600

 


 

65,280

 

13,600

 


 

68,000

 


 

78,880

 


 

126,000

 


 

126,000

 


 

112,000

 


 

112,000

 


 

Sales

 

Costs

 

Other expenses

 


 

0.77792732

 


 

Net income

 

Dividends

 

Addition to retained earn

 

0.2

 

Dividends

 

32869.2

 

Add2RE

 

76,695

 

NewRT

 

223,415

 

Assets

 

Current assets

 

Cash

 

$

 

Accounts receivable

 


 

Inventory

 


 

Total

 

$

 

Fixed assets

 

Net plant $

 

Retained earnings

 


 

27,027

 

63,063

 

0.15

 

31408.65

 

73,287

 


 

0.25

 

34329.75

 

80,103

 


 

Liabilities and Owners? Equity

 

0.2 Current liabilities

 

20,240

 

24288 Accounts p$

 

32,560

 

39072 Notes payable

 


 

69,520

 


 

122,320

 

330,400

 


 

83424

 


 

Total

 


 

$

 


 

146784 Long-term d$

 

Owners? equity

 

396480 Common st$

 


 

146,720

 


 

223,415

 


 

Total

 


 

Total assets $

 


 

0.35

 


 

452,720

 


 

$

 


 

258,720

 


 

335,415

 


 

543,264 Total liabili $

 


 

452,720

 


 

540,295

 


 

Full capacity sales = $sales / 0.80

 

0.8

 

Full Cap Sales

 

928750

 

Full capacity ratio = Fixed assets / Full capacity sales

 

Full Cap Ratio 0.35574697

 

Total Fix Ass

 

317184

 

EFN

 

-76,327

 

EFN

 

2,969

 

0.2

 

0.15

 

Total Fix Ass

 

303968

 

EFN

 

303,968

 

EFN

 

0

 

0.25

 

Total Fix Ass

 

330400

 

EFN

 

EFN

 

0

 


 

 


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