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Below is the Dec 31, 2018 Balance Sheet for Everett Enterpri…

Posted byAnonymous August 7, 2021December 28, 2023

Questions

Belоw is the Dec 31, 2018 Bаlаnce Sheet fоr Everett Enterprises. Assume sаles revenue fоr 2018 is $7 million. Assume capacity is at 100% in 2018, and that in 2019 sales are anticipated to increase 10% with a profit margin of 5 %.  Everett’s forecasted 2019 retention ratio is 20%.             Balance Sheet Dec. 31, 2018                               Assets Cash                                                    100,000               Accounts Receivable                         500,000 Inventory                                            600,000               Current Assets                                1,200,000                 Net Fixed Assets                             1,600,000                                                                                                                                                                                                __________                                          ________             Total Assets                                     2,800,000                                     Liabilities and Equity Accounts Payable                           325,000 Accruals                                              95,000 Notes Payable                                  205,000  Current Liabilities                             625,000    LT Debt                                          1,000,000 Common Stock                                950,000 Retained Earnings                            225,000 _____________                                 ________   Total Liabilities and Equity           2,800,000   a. Use the AFN equation to determine the additional funding needed in 2019 in order to support the projected sales increase?   b. How much of a sales increase could Everett Enterprises support without the need for external financing (Based on the AFN equation)?   c. What will be the AFN if capacity is only 95% in 2018?    d. What will be the following values on the projected balance sheet for 2019 based on the assumptions of the AFN equation but assuming 95% capacity instead of 100% capacity.   Retained Earnings =   Net Fixed Assets =   Notes Payable =  

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