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    Chapter 09. Student CH 09-10 Build A Model: Assets

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    seth litchfield
    The document provides financial statements and assumptions to forecast Zeiber Corporation's 2013 income statement and balance sheet. It includes sales, expense, asset, and liability ratios from 2012 to apply to the 2013 forecast. The assumptions include a 6% sales growth rate and constant ratios. Additional funds needed are calculated to be $4,525, which would be raised as notes payable since no new stock or bonds will be issued. The forecasted levels of notes payable and special dividends are $4,525 and $0, respectively.

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    Chapter 09. Student CH 09-10 Build A Model: Assets

    Uploaded by

    seth litchfield
    106 views4 pages
    The document provides financial statements and assumptions to forecast Zeiber Corporation's 2013 income statement and balance sheet. It includes sales, expense, asset, and liability ratios from 2012 to apply to the 2013 forecast. The assumptions include a 6% sales growth rate and constant ratios. Additional funds needed are calculated to be $4,525, which would be raised as notes payable since no new stock or bonds will be issued. The forecasted levels of notes payable and special dividends are $4,525 and $0, respectively.

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    Module 9a hw

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    The document provides financial statements and assumptions to forecast Zeiber Corporation's 2013 income statement and balance sheet. It includes sales, expense, asset, and liability ratios from 2012 to apply to the 2013 forecast. The assumptions include a 6% sales growth rate and constant ratios. Additional funds needed are calculated to be $4,525, which would be raised as notes payable since no new stock or bonds will be issued. The forecasted levels of notes payable and special dividends are $4,525 and $0, respectively.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    106 views4 pages

    Chapter 09. Student CH 09-10 Build A Model: Assets

    Uploaded by

    seth litchfield
    The document provides financial statements and assumptions to forecast Zeiber Corporation's 2013 income statement and balance sheet. It includes sales, expense, asset, and liability ratios from 2012 to apply to the 2013 forecast. The assumptions include a 6% sales growth rate and constant ratios. Additional funds needed are calculated to be $4,525, which would be raised as notes payable since no new stock or bonds will be issued. The forecasted levels of notes payable and special dividends are $4,525 and $0, respectively.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    of 4

    Chapter 09.

    Student Ch 09-10 Build a Model

    Zieber Corporation's 2012 financial statements are shown below. Forecast Zeiber's 2013 income statement and
    balance sheets. Use the following assumptions: (1) Sales grow by 6%. (2) The ratios of expenses to sales,
    depreciation to fixed assets, cash to sales, accounts receivable to sales, and inventories to sales will be the same in
    2013 as in 2012. (3) Zeiber will not issue any new stock or new long-term bonds. (4) The interest rate is 9% for short-
    term debt and 11% for long-term debt. (5) No interest is earned on cash. (6) Dividends grow at an 8% rate. (6)
    Calculate the additional funds needed (AFN). If new financing is required, assume it will be raised as notes payable.
    Assume that any new notes payable will be borrowed on the last day of the year, so there will be no additional
    interest expense for the new notes payable. If surplus funds are available, pay a special dividend.

    a. What are the forecasted levels of notes payable and special dividends?

    Key Input Data: Used in the


    forecast
    Tax rate 40%
    Dividend growth rate 8%
    S-T rd 9%
    L-T rd 11%

    December 31 Income Statements:


    (in thousands of dollars)
    Forecasting 2012 2013
    2012 basis Ratios Inputs
    Sales $455,150 Growth 6.00%
    Expenses (excluding depr. & amort.) $386,878 % of sales 85.000% 85.00%
    EBITDA $68,273
    Depreciation and Amortization $14,565 % of fixed assets 8.000% 8.00%
    EBIT $53,708
    Net Interest Expense $11,880 Interest rate x beginning of year debt
    EBT $41,828
    Taxes (40%) $16,731
    Net Income $25,097
    Common dividends (regular dividends) $12,554 Growth 8.00%
    Special dividends 8.00%
    Addition to retained earnings (DRE) $12,543

    December 31 Balance Sheets


    (in thousands of dollars)
    Forecasting 2012 2013
    2012 basis Ratios Inputs Without AFN
    Assets:
    Cash $18,206 % of sales 4.000% 4.000% $19,298
    Accounts Receivable $100,133 % of sales 22.000% 22.000% $106,141
    Inventories $45,515 % of sales 10.000% 10.000% $48,246
    Total current assets $163,854 $173,685
    Fixed assets $182,060 % of sales 40.000% 40.000% $192,984
    Total assets $345,914 $366,669

    Liabilities and equity


    Accounts payable $31,861 % of sales 7.000% 7.000% $33,772
    Accruals $27,309 % of sales 6.000% 6.000% $28,948
    Notes payable $0 Previous $0
    Total current liabilities $59,170 $62,720
    Long-term debt $120,000 Previous $120,000
    Total liabilities $179,170 $182,720
    Common stock $60,000 Previous $60,000
    Retained Earnings $106,745 Previous + DRE $119,424
    Total common equity $166,745 $179,424
    Total liabilities and equity $345,914 $362,144
    $0.000
    Total assets = $366,669
    Planned liabilities and equity = $362,144
    Additional funds needed (AFN) = $4,525

    Required additional notes payable = $4,525


    Special dividends $0
    tement and
    sales,
    ll be the same in
    te is 9% for short-
    % rate. (6)
    s notes payable.
    additional

    2013
    Forecast
    $482,459
    $410,090
    $72,369
    $15,439
    $56,930
    $13,200
    $43,730
    $17,492.06
    $26,238
    $13,558
    $0
    $12,680

    2013
    AFN
    $4,525

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