Cheryl Colby, CFO of Charming Florist Ltd., has created the firm’s pro forma balance sheet for the next fiscal year. Sales are projected to grow by 12 percent to $490 million. Current assets, fixed assets, and short-term debt are 20 percent, 75 percent, and 10 percent of sales, respectively. The company pays out 25 percent of its net income in dividends. The company currently has $134 million of long-term debt, and $62 million in common stock par value. The profit margin is 10 percent.
a. Prepare the current balance sheet for the firm using the projected sales figure. (Do not round intermediate calculations. Accounts should be entered by order of liquidity (e.g. current accounts before long-term). Enter your answers in dollars, not millions of dollars, e.g. 1,234,567.)
b. Based on the sales growth forecast, how much does the company need in external funds for the upcoming fiscal year using the EFN equation from the textbook? (Do not round intermediate calculations. Enter your answer in dollars, not millions of dollars, e.g. 1,234,567.)
c-1. Prepare the firm’s pro forma balance sheet for the next fiscal year. (Do not round intermediate calculations. Accounts should be entered by order of liquidity (e.g. current accounts before long-term). Enter your answers in dollars, not millions of dollars, e.g. 1,234,567.)
c-2. Calculate the external funds needed. (Do not round intermediate calculations. Enter your answer in dollars, not millions of dollars, e.g. 1,234,567.)