Exam 18: Financial Modelling and Pro Forma Analysis

Use the table for the question(s) below. Pro Forma Income Statement for Ideko, 2014-2019 -With the proper changes it is believed that Ideko's credit policies will allow for an account receivables days of 60.The forecasted accounts receivable for Ideko in 2016 is closest to:

The asset and liability side of a pro forma balance sheet projection will not balance,in general,unless we make assumptions about how ________ and ________ will grow with sales.

Use the table for the question(s) below. Pro Forma Income Statement for Ideko, 2014-2019 -Internal growth rate indicates whether a planned investment will increase or decrease firm value.

Use this information for the following questions: XYZ Corp has the following financial information: Net income = $1 million Debt = $5 million Cost of debt = 4% Depreciation = $50,000 Capital Expenditures = $100,000 Increase in NWC = $10,000 -XYZ has excess cash of $600,000 and earns 3% on excess cash.The firm plans to pay back $500,000 of debt this year,after paying the full annual interest on its debt.If XYZ has a corporate tax rate of 40%,what is the free cash flow to the firm?

When making long-term plans,any increases in ________ and ________ reflect capital structure decisions that require managers to actively raise capital.

Granger Inc.has done a long-term forecast of its balance sheet.The current liabilities are projected to be $25 million and other long-term liabilities are $10 million.If the firm expects to need $8 million in net new financing,what are the projected total assets?

Use the table for the question(s) below. Pro Forma Income Statement for Ideko, 2014-2019 -The maximum growth rate that a firm can achieve without issuing new equity or by increasing its debt-to-equity ratio is the firm's sustainable growth rate.

Using the percent of sales method,and assuming 20% growth in sales,estimate Billy's Burgers' inventory for 2016.

Use this information for the following questions: XYZ Corp has the following financial information: Net income = $1 million Debt = $5 million Cost of debt = 4% Depreciation = $50,000 Capital Expenditures = $100,000 Increase in NWC = $10,000 -XYZ has no excess cash and a corporate tax rate of 30%.The firm plans to issue new debt of $2 million this year.What is the free cash flow to equity?

A firm expects growth next year to be 10%.Its sustainable growth rate is 12%.Which of the following is true?

A firm has $20 million in equity and $20 million of debt,it pays dividends of 20% of net income,and has a net income of $5 million.What is the firm's sustainable growth rate?

A firm has $20 million in equity and $10 million in debt.The firm forecasts that this year's net income will be $2.5 million.It currently pays dividends equal to 30% of its net income.If the firm decides to change its payout policy to 40% of net income,how would this change its internal growth rate?

A firm has ROA of 20%,ROE of 25%,and a payout ratio of 30%.What is the firm's internal growth rate?

The ________ method assumes that as sales grow,many income statement and balance sheet items will grow,remaining the same percent of sales.

Granger Inc.has done the following projections for its balance sheet: total assets of $85 million,current liabilities of $29 million,long-term liabilities of $43 million.If the firm will require net new financing of $1 million,what is the projected amount of stockholders' equity?

A firm expects growth next year to be 12%.Its sustainable growth rate is 10%.Which of the following is true?

Assuming that Ideko has a EBITDA multiple of 9.4,then the continuation equity value of Ideko in 2015 is closest to:

Use the table for the question(s) below. Ideko Sales and Operating Cost Assumptions -Based upon Ideko's sales and operating cost assumptions,what production capacity will Ideko require in 2016?

Assuming that Ideko has a EBITDA multiple of 8.5,then the continuation levered price-earnings ratio of Ideko in 2015 is closest to:

Use the table for the question(s) below. Pro Forma Income Statement for Ideko, 2014-2019 -The amount of the increase in net working capital for Ideko in 2016 is closest to: