Consider the following simplified financial statements for the Yoo Corporation (
ID: 2778337 • Letter: C
Question
Consider the following simplified financial statements for the Yoo Corporation (assuming no income taxes):
The company has predicted a sales increase of 20 percent. Assume Yoo pays out half of net income in the form of a cash dividend. Costs and assets vary with sales, but debt and equity do not.
Prepare the pro forma statements. (Input all amounts as positive values. Do not round intermediate calculations and round your answers to the nearest whole dollar amount.)
What is the external financing needed? (Do not round intermediate calculations. Negative amount should be indicated by a minus sign.)
Consider the following simplified financial statements for the Yoo Corporation (assuming no income taxes):
Explanation / Answer
Sales 40,000 Cost 34,160 Net Income 5,840 Assets 26,000 Debt 7,000 Equity 19,000 Total 26,000 Total 26,000 Increase in sales @ 20% Sales 48,000 Cost 40,992 Net Income 7,008 Assets 31,200 Debt 7,000 Equity 19,000 Total 31,200 Total 26,000 Total Finance needed 5,200 Out of which last year dividends would be deducted 2,920 Total external Finance needed 2,280