Question

the third picture is the question the 2 first are the informations

EAST COAST YACHTS 2010 Balance Sheet Current liabilities S 24,546,000 Current assets 11,232,000 Accounts payable Cash and equivalents Accounts receivable Inventories Other 0,208,000 Notes payable 22,656,000 Accrued expenses 6,185,000 S 49,456,000 184,000 Total current liabilities 55,280,000 $146,560,000 $146,560,000 Total current assets Long-term debt Fixed assets Total long-term liabilities $462,030,000 (114,996,000) Property, plant, and equipment Less accumulated depreciation Net property, plant, and equipment $347,034,000 Total fixed assets 6,840,000 Stockholders' equity 353874,000 Preferred stock S 3,000,000 40,800,000 31,200,000 186,138,000 48,000,000) $213,138,000 409,154,000 Total liabilities and shareholders' equity $409,154.000 Intangible assets and others Common stock Capital surplus Accumulated retained earnings Less treasury stock Total equity Total assets Yacht Industry Ratios LOWER QUARTILE MEDIAN UPPER QUARTILE Current ratio Quick ratio Total asset turnover Inventory turnover Receivables turnover Debt ratio Debt-equity ratio Equity multiplier Interest coverage Profit margir Return on assets Return on equity 0.86 1.51 0.75 1.27 14.38 17.65 0.49 0.83 1.97 1.01 12.18 10.25 0.32 16.43 22.43 1.03 2.03 10.83 5.02% 7.05% 9.06% 8.21 7.48% 10.67% 14.32% 9.05% 14.16% 22.41% Scenario #3. Assume that East Coast Yachts is currently producing at 100 percent of capacity and sales are expected to grow at 20% next year. Fixed assets will not vary as a percentage of sales. Instead, the company must set up an entirely new line at a cost of $95,000,000, and the new line will be depreciated at 4.63% every year. Prepare pro forma income statements and balance sheets. Calculate external funds needed. Without external equity financing, what do you recommend the firm can do to implement the expansion plans?

Answer 1

Answer

Existing Information Income Statement Sales Balance Sheet Current Assets Fixed assets Total assets 617,760,000 55,280,000 353,874,000 409,154,000 Net Income before Depreiation Liabilit Current Liabilities Long term Debt 46,382,400 49,456,000 146,560,000 Equit Common Stock Preferreed Stock Capital Surplus Retained Earnings Treasury Stock Total Equit Total Liability & Equit 40,800,000 3,000,000 31,200,000 186,138,000 48,000,000) 213,138,000 409,154,000 Sales Increase 20% Workin Sales Incremental Sales-Existing x 20%) Projected sales Profit Margin (PM 617,760,000 123,552,000 741,312,000 Net Income/sales d Dividend/Net Income 7.51%) Given 38%) Given Current assets, and Current Liabilities will increase with sales. Long term debt and common stock and other ltems of equity (other than retained earnings) will remain the same. Fixed Assets is increased by 95 million (given) Proiected current assets- Proiected current liabilitiess roiected net income-PM*Projected sales Additional Depreciation projected net income- 66,336,000 59,347,200 55,658,880 4,398,500) 51,260,380 Addition to retained earnings Net income (1-d) projected retained earnings Rounded off 31,863,600 218,001,600 218,001,600

Performa Income Statement Sales Cost of Goods Sold Gross Margin Selling General & admin expenses Depreciation EBIT Interest Expense EBT laxe Net Income 741,312,000 522,432,000 218,880,000 88,588,800 28,590,500 101,700,700 13,334,400 88,366,300 37,105,920 51,260,380 19,396,780 31,863,600 Retained Earnings Performa Balance Sheet Current Assets Total Current Liabilities 66,336,000 444,475,500 59,347,200 146,560,000 Remain constant 59,902,700 Plug-in Fixed assets Long term Debt Total Liabilities 265,809,900 Other Component of Equit Retained Earnings Total Equity Total Liability & Equity 27,000,000 Remain constant 218,001,600 245,001,600 510,811,500 Total assets 510,811,500 Externl Financing needed EFN 59,902,700 Performa Balance Sheet Current Liabilities Accounts Payable Notes Payable Accrued Expenses Total Current Liabilities Long term Debt Total Longterm Liabilities External Finance Needed (EFN Stockholder's Equity Prefererd Stock Common Stock Capital Surplus Retained Earnings Treasury Stock Total Equity Total Liability & Equity Current Assets Cash and equivalents Account Receivables Inventories 13,478,400 24,249,600 27,187,200 1,420,800 66,336,000 29,455,200 22,470,000 7,422,000 59,347,200 Total Current Assets Fixed Assets 146,560,000 59,902,700 Plant & Equipments ro Less: Acc Dep Net Property Plant & Equipments Intangible assets and others Total Fixed Assets 557,030,000 (119,394,500) 437,635,500 6,840,000 444,475,500 3,000,000 40,800,000 31,200,000 218,001,600 48,000,000) 245,001,600 510,811,500 Total Assets 510,811,500