FCF 7thE Chapter04 Stu
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Transcript of FCF 7thE Chapter04 Stu
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Chapter 4Problems 4,6,21,23,26,27
Input boxes in tan
Output boxes in yellow
Given data in blue
Calculations in red
Answers in green
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Chapter 4Question 4
Input area:
SalesCostsAssetsDebtEquityNext year's salesDividend paid
Tax rate
Output area:
Percent increase in sales = #DIV/0!
Pro forma income statement Pro forma balance sheetSales -$ Assets #DIV/0! Debt -$Costs #DIV/0! Equity #DIV/0!Taxable income #DIV/0! Total #DIV/0! Total #DIV/0!
Taxes #DIV/0!Net income #DIV/0!
Dividends #DIV/0!Add. To RE #DIV/0!
External financing = Total assets - Total debt & equity = #DIV/0!
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Chapter 4Question 6
Input area:
SalesCostsCurrent assetsFixed assetsDebtEquity
Payout ratio
Tax rate
Output area:
Sales -$ Current assetsCosts - Fixed assetsTaxable income -$Taxes - Total
Net income -$
Dividends -$Add. To RE -
Return on assets = Net income / Total assets = #DIV/0!Internal growth rate = (Return on assets X b) / (1 - Return on a
Return on equity = Net income / Total equity = #DIV/0!
Sustainable growth rate = (Return on equity X b) / (1 - Return o
Income statement
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-$ Debt -$- Equity -
-$ Total -$
b = 1.0sets X b) = #DIV/0!
n equity X b) = #DIV/0!
Balance sheet
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Chapter 4Question 21
Input area:
Total debt ratio 0.60Payout ratio 60%Total asset turnover 1.80Profit margin 6.4%
Output area:
Debt/equity 1.5
Return on assets 11.52%
b = 1 - Payout ratio = 0.4
Return on equity 28.80%
Sustainable growth rate 13.02%
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Chapter 4Question 23
Input area:
Beginning TABeginning equityEnding TANet incomeDividends
Output area:
Ending equity -$Plowback ratio #DIV/0!
ROE (beg. equity) #DIV/0!ROE (ending equity) #DIV/0!
Exact SGR #DIV/0!
ROE x b (using beg. #DIV/0!
Equity for ROE)
ROE x b (using end #DIV/0!
Equity for ROE)
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Chapter 4Questions 26-27
Input area:
For problems 26 and 27, change the
percent sales growth rate in the input
area below.
SalesCostsOther expensesInterest expenseCash
Accounts receivableInventoryNet plant and equipment
Accounts payableNotes payableLong-term debtCommon stock
Retained earnings2004 Net incomeDividends
Add. to retained earnings
Sales increaseOperating capacityTax rate
Output area:
Dividend payout ratio = #DIV/0!
2005 Pro Forma Income Statement Assets Liabilities and owners' equitySales -$ Current assets Current liabilitiesCosts - Cash -$ Accounts payable -$Other expenses - Accounts receivable - Notes payable -EBIT -$ Inventory - Total -$Interest expense - Total -$ Long-term debt -Taxable income -$ Fixed assetsTaxes - Net plant and Owners' equityNet income -$ equipment - Common stock and -$
Dividends #DIV/0! paid-in surplusAdd. To RE #DIV/0! Retained earnings #DIV/0!
Total #DIV/0!Total liabilities and
Total assets -$ owners' equity #DIV/0!
External financing = Total assets - Total debt & equity = #DIV/0!
#25 and #28
Full capacity sales = 2004 Sales / Operating capacity = #DIV/0!Fixed assets required at full capacity = Fixed assets / Full capacity sales = #DIV/0!Total fixed assets = Fixed assets required X 2004 Sales = #DIV/0!
External financing needed = #DIV/0!
#27
2004 Debt/equity ratio = #DIV/0!New total debt = #DIV/0!
External financing needed = #DIV/0!
