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    Test - Financial Planning

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    MasTer PanDa
    The document provides financial information for Finplan Corp. and Planfin Inc. including their 2018 and projected 2019 balance sheets. For Finplan, it is determined that the additional funds needed in 2019 is 88,000, which will come from long-term debt. The internal growth rate is calculated to be 6%. Projected figures for Finplan's 2019 current assets, total assets, and total equity are 840,000, 1,400,000, and 632,000 respectively. For Planfin, calculations show the full capacity intensity ratio is 1.5. The total fixed assets needed for 2019 is projected to be 112,500. Planfin's projected 2019 total assets and total liabilities/equity before

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    Test - Financial Planning

    Uploaded by

    MasTer PanDa
    426 views3 pages
    The document provides financial information for Finplan Corp. and Planfin Inc. including their 2018 and projected 2019 balance sheets. For Finplan, it is determined that the additional funds needed in 2019 is 88,000, which will come from long-term debt. The internal growth rate is calculated to be 6%. Projected figures for Finplan's 2019 current assets, total assets, and total equity are 840,000, 1,400,000, and 632,000 respectively. For Planfin, calculations show the full capacity intensity ratio is 1.5. The total fixed assets needed for 2019 is projected to be 112,500. Planfin's projected 2019 total assets and total liabilities/equity before

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    Test- Financial Planning

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    The document provides financial information for Finplan Corp. and Planfin Inc. including their 2018 and projected 2019 balance sheets. For Finplan, it is determined that the additional funds needed in 2019 is 88,000, which will come from long-term debt. The internal growth rate is calculated to be 6%. Projected figures for Finplan's 2019 current assets, total assets, and total equity are 840,000, 1,400,000, and 632,000 respectively. For Planfin, calculations show the full capacity intensity ratio is 1.5. The total fixed assets needed for 2019 is projected to be 112,500. Planfin's projected 2019 total assets and total liabilities/equity before

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    426 views3 pages

    Test - Financial Planning

    Uploaded by

    MasTer PanDa
    The document provides financial information for Finplan Corp. and Planfin Inc. including their 2018 and projected 2019 balance sheets. For Finplan, it is determined that the additional funds needed in 2019 is 88,000, which will come from long-term debt. The internal growth rate is calculated to be 6%. Projected figures for Finplan's 2019 current assets, total assets, and total equity are 840,000, 1,400,000, and 632,000 respectively. For Planfin, calculations show the full capacity intensity ratio is 1.5. The total fixed assets needed for 2019 is projected to be 112,500. Planfin's projected 2019 total assets and total liabilities/equity before

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    Financial Planning

    Problem 1 (20 points)

    Finplan Corp. has the following balance sheet as of December 31, 2018:

    Projected
    2018 2019
    Current Assets P 600,000 2019
    Fixed Assets 400,000 840,000
    Total Assets P1,000,000 560,000
    1,400,000
    Accounts Payable 100,000 140,000
    Accrued Liabilities 100,000 140,000
    Notes Payable 100,000 100,000
    Long-term debt 300,000 388,000
    Total Common Equity 400,000 632,000
    Total Liabilities & 1,400,000
    P1,000,000
    Equity
    External Funds Needed 88,000
    Projected Total Liabilities and Equity 1,400,000

    In 2018, the company reported sales of P5,000,000, net income of P100,000 and
    dividends of P40,000. The company anticipates its sales will increase by 20% in 2019
    and its dividend pay-out will remain 40%. Assume the company is at full capacity, so
    its assets and spontaneous liabilities will increase proportionately with increase in
    sales.  Assume the company uses AFN formula and all additional funds needed will
    come from issuing long term debt.  

    Required:

    1. Compute for the additional funds needed using the AFN/EFN equation. –
    88,000
    2. Fill up the figures for 2019 projections in the blanks provided above.
    3. Compute for the Internal growth rate. - 6%
    4. How much is the projected Current Assets? – 840,000
    5. How much is the projected Total Assets? – 1,400,000
    6. How much is the projected Equity? – 632,000
    Problem 2  (15 points)  Show necessary computations

    The balance sheet of Planfin, Inc.as of December 31st is given below:

    Cash P 10,000 Accounts payable P 15,000

    Accounts Receivable 25,000 Notes payable 20,000

    Inventories 40,000 Accrued Expenses 15,000


    Net Fixed Assets 75,000 Long term debt 30,000
    Common Equity 70,000
    P150,000 P150,000
    Total Debt &
    Total Assets 
    Equity
    ======== ========

    Sales during the past year were P100,000, and they are expected to rise by 50 percent
    during the next year.  Also, during last year, fixed assets were utilized to only 85
    percent of capacity, so Planfin could have supported P100,000 of sales with fixed
    assets that were only 85 percent of last year’s actual fixed assets.  Assume that
    Planfin’s profit margin will remain constant at 5 percent and that the company will
    continue to pay 60 percent of its earnings as dividends.

    Required:  

    1. Compute for the full capacity intensity ratio

    Total Assets/Sales = 150,000/100,000

    =1.5

    2. How much is the total amount of fixed asset needed in 2019?

    (75,000 *.5) + 75,000 = 112,500

    3. How much is the 2019 projected total Assets?

    225,500 = 15,000 + 37,500 + 112,500 + 60,000

    4. How much is the 2019 projected total Liabilities and Equity before the
    additional funds needed?

    225,000 = (22,500 *2) +30,000 + 45,000 + 105,000


    5. How much is the total additional funds needed?

    75,000 - 15,000 - 4,500 =55,500

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