## 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

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

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

Dividends

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

0.2

Dividends

32869.2

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

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

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

0.2

Dividends

32869.2

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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