b)Assume that Angostura is currently operating at fullcapacity. All costs/expenses/income and net working capital vary directly withsales/revenue.Interest Expenses will remainunchanged. The tax rate and the dividend pay-out ratiowill remainconstant.How much additional debt is required, if any, if no new equity is raised and sales/revenue are projected to increaseby10% c) Pro forma statement
b)Assume that Angostura is currently operating at fullcapacity. All costs/expenses/income and net working capital vary directly withsales/revenue.Interest Expenses will remainunchanged. The tax rate and the dividend pay-out ratiowill remainconstant.How much additional debt is required, if any, if no new equity is raised and sales/revenue are projected to increaseby10% c) Pro forma statement
Chapter17: Multinational Capital Structure And Cost Of Capital
Section: Chapter Questions
Problem 2ST
Related questions
Question
b)Assume that Angostura is currently operating at fullcapacity.
All costs/expenses/income and net working capital vary directly withsales/revenue.Interest Expenses will remainunchanged.
The tax rate and the dividend pay-out ratiowill remainconstant.How much additional debt is required, if any, if no new equity is raised and sales/revenue are projected to increaseby10%
c) Pro forma statement
![Angostura Holdings Limited
Income Statement
For the Years ended Dec 2018 and 2019
2019
2018
s'00
000,$
Sales
Cost of Sales
847,200
783,692
Gross Profit
-429,723
-392,209
Distribution Costs
417.477
391,483
-140,205
Admin Expenses
Other Operating Expenses
-145,010
-88,713
-69,935
Interest Income
-4,304
-2,487
Other Comprehensive Income
8,648
5,201
9.434
-1,337
Earnings Before Interest and Taxes
Interest Expense
202,337
177,915
-559
-312
Taxable Income
201,778
177,603
Taxation
-59,935
-47,685
Net Income
141,843
129,918
Dividends
-57,744
Addition to Retained Earnings
84,099
Angostura Holdings Limited
Statement of Financial Position (Abridged)
For the period ending Dec, 31 2019
2019
2018
2019
2018
('000s)
('000s)
("000s)
("000s)
LIABILITIES AND
ASSETS
EQUITY
Current Assets
Current Liabilities
Inventories
253,769
245,491 Accounts Payables
Other Current
107 299
80,929
Accounts Receivables
185,870
145.742 Liabilities
16572
4098
Other Current Assets
411461
318475
123,871
85.027
Cash & Equivalents
103,151
119,075 Non-current Liabilities
77,337
75,705
954,251
828,783 Total Liabilities
201,208
160.732
Non-Current Assets,
387,117 Equity
Share Capital
Net
388.458
221588
219354
Retained Earnings
919.913
835,814
Total Equity
1,141.501
1,055,168
TOTAL ASSETS
1,342,709
1,215.900 TOTAL LIAB. & EQUITY
1,342.709
1,215.900](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F27a6d3a5-bfda-4314-9083-95bfc1b27388%2F6480e6ca-5e8a-4456-b14b-3677d3082ef5%2Fvjhukkt_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Angostura Holdings Limited
Income Statement
For the Years ended Dec 2018 and 2019
2019
2018
s'00
000,$
Sales
Cost of Sales
847,200
783,692
Gross Profit
-429,723
-392,209
Distribution Costs
417.477
391,483
-140,205
Admin Expenses
Other Operating Expenses
-145,010
-88,713
-69,935
Interest Income
-4,304
-2,487
Other Comprehensive Income
8,648
5,201
9.434
-1,337
Earnings Before Interest and Taxes
Interest Expense
202,337
177,915
-559
-312
Taxable Income
201,778
177,603
Taxation
-59,935
-47,685
Net Income
141,843
129,918
Dividends
-57,744
Addition to Retained Earnings
84,099
Angostura Holdings Limited
Statement of Financial Position (Abridged)
For the period ending Dec, 31 2019
2019
2018
2019
2018
('000s)
('000s)
("000s)
("000s)
LIABILITIES AND
ASSETS
EQUITY
Current Assets
Current Liabilities
Inventories
253,769
245,491 Accounts Payables
Other Current
107 299
80,929
Accounts Receivables
185,870
145.742 Liabilities
16572
4098
Other Current Assets
411461
318475
123,871
85.027
Cash & Equivalents
103,151
119,075 Non-current Liabilities
77,337
75,705
954,251
828,783 Total Liabilities
201,208
160.732
Non-Current Assets,
387,117 Equity
Share Capital
Net
388.458
221588
219354
Retained Earnings
919.913
835,814
Total Equity
1,141.501
1,055,168
TOTAL ASSETS
1,342,709
1,215.900 TOTAL LIAB. & EQUITY
1,342.709
1,215.900
![The House of Angostura known as Angostura Linmited, is a Trinidad and Tobago company
famous for the production of Angostura bitters, invented by the company's founder. The
company is also a distiller and is the major producer of rum in Trinidad and Tobago. The
company also has been used as a vehicle for international expansion by its parent company.
CL Financial. As a result of these acquisitions, the company owns distillers in the United
States, Canada, The Bahamas and Suriname.
The company was founded around 1830 in the Venezuelan town of Angostura (now Ciudad
Bolívar) by a German doctor, Johann Gottlieb Benjamin Siegert, Surgeon-General in Simon
Bolivar's army in Venezuela. Around 1820 he had tried to find a medicine to improve appetite
and digestive well-being of the soldiers. He finally arrived at a unique blend of herbs in 1824.
In 1830, Siegert exported his unique aromatic bitters to England and Trinidad. Upon his death
in 1870, Siegert left the care of the company to his younger brother and son, who
subsequently moved it to Port of Spain, Trinidad six years later in 1876. Over the course of
time, Angostura bitters became the only supplier to the King of Prussia, Spain, and King
George V.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F27a6d3a5-bfda-4314-9083-95bfc1b27388%2F6480e6ca-5e8a-4456-b14b-3677d3082ef5%2Fcyzs81h_processed.jpeg&w=3840&q=75)
Transcribed Image Text:The House of Angostura known as Angostura Linmited, is a Trinidad and Tobago company
famous for the production of Angostura bitters, invented by the company's founder. The
company is also a distiller and is the major producer of rum in Trinidad and Tobago. The
company also has been used as a vehicle for international expansion by its parent company.
CL Financial. As a result of these acquisitions, the company owns distillers in the United
States, Canada, The Bahamas and Suriname.
The company was founded around 1830 in the Venezuelan town of Angostura (now Ciudad
Bolívar) by a German doctor, Johann Gottlieb Benjamin Siegert, Surgeon-General in Simon
Bolivar's army in Venezuela. Around 1820 he had tried to find a medicine to improve appetite
and digestive well-being of the soldiers. He finally arrived at a unique blend of herbs in 1824.
In 1830, Siegert exported his unique aromatic bitters to England and Trinidad. Upon his death
in 1870, Siegert left the care of the company to his younger brother and son, who
subsequently moved it to Port of Spain, Trinidad six years later in 1876. Over the course of
time, Angostura bitters became the only supplier to the King of Prussia, Spain, and King
George V.
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