constant 35 percent dividend payout ratio and has no plans to issue new equity. Any financing needed will be raised through the sale of long-term debt. Prepare pro forma financial statements for the coming year based on this information, and calculate the EFN for Tomey. Tomey Supply Company Income Statement and Balance Sheet Income Statement Balance Sheet Revenues $1,768,121 Assets

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter4: Financial Planning And Forecasting
Section: Chapter Questions
Problem 7P
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Tomey Supply Company’s financial statements for the most recent fiscal year are shown below. The company projects that sales will increase by 11 percent next year. Assume that all costs and assets increase directly with sales. The company has a constant 35 percent dividend payout ratio and has no plans to issue new equity. Any financing needed will be raised through the sale of long-term debt. Prepare pro forma financial statements for the coming year based on this information, and calculate the EFN for Tomey. 

Tomey Supply Company Income Statement and Balance Sheet
Income Statement   Balance Sheet
Revenues $1,768,121   Assets  
Costs 1,116,487   Current Assets $280,754
EBT 651,634   Net Fixed Assets

713,655

Taxes (35%)

228,072

  Total assets $994,409
Net Income $423,562      
      Liabilities and Equity:
 
      Current Liabilities $167,326
      Long-term debt 319,456
      Common Stock 200,000
      Retained Earnings

307,627

      Total liabilities & equity $994,409

 

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