Balance Sheet as of December 31, 2019 (Thousands of Dollars) Cash $ 1,080 Accounts payable Accruals $ 4,320 Receivables 6,480 2,880 9,000 $16,560 Inventories Line of credit Total current assets Notes payable 2,100 $ 9,300 Net fixed assets 12,600 Total current liabilities Mortgage bonds Common stock 3,500 3,500 $29,160 Retained earnings Total liabilities and equity 12,860 $29,160 Total assets Income Statement for December 31, 2019 (Thousands of Dollars) $36,000 34,000 $ 2,000 Sales Operating costs Earnings before interest and taxes Interest 160 $ 1,840 Pre-tax earnings Taxes (25%) 460 Net income $ 1,380 Dividends 552 Addition to retained earnings $ 828
Stevens Textile Corporation’s 2019 financial statements are shown here. Stevens grew rapidly in 2019 and financed the growth with notes payable and long-term bonds. Stevens expects sales to grow by 15% in the next year but will finance the growth with a line of credit, not notes payable or long-term bonds. Use the
to forecast a balance sheet and income statement for December 31, 2020. The interest rate on all debt is 10%, and cash earns no interest income. The line of credit is added at the end of the year, which means that you should base the forecasted interest expense on the balance of debt at the beginning of the year. Use the
the addition to
a. What is the projected value for earnings before interest and taxes?
b. What is the projected value for pre-tax earnings?
c. What is the projected net income?
d. What is the projected addition to retained earnings?
e. What is the projected value of total current assets?
f. What is the projected value of total assets?
g. What is the projected sum of accounts payable, accruals, and notes payable?
h. What is the forecasted line of credit?
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