Exam 18: Financial Modelling and Pro Forma Analysis

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 has interest expense of $2500 each year for ten years.If the tax rate is 30% and the discount rate is 7%,compute the value of the interest rate tax shield.

A services firm does all its business in cash only.The firm projects a cash balance of of $3000 in its account after all taxes and costs are paid.The owners plan to invest $8000 and pay a dividend of $1000.How much net new financing is needed?

XYZ plans to pay back $500,000 worth of debt this year.If the corporate tax rate is 25%,what is the free cash flow to equity?

Use the tables for the question(s)below. Pro Forma Income Statement for Ideko,2010-2015 Pro Forma Balance Sheet for Ideko,2010-2015 -Assuming that Ideko has a EBITDA multiple of 9.4,then the continuation levered price-earnings ratio of Ideko in 2015 is closest to:

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

LG Inc.has done a long-term forecast of its balance sheet.The projected total assets for the next year are $200 million.The current liabilities are projected to be $100 million and other long-term liabilities are $70 million.How much net new financing is needed in the following year?

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.

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?

The market size for Loppins is 80 million units.If SPI Inc.has a market share of 30% and the average sales price is $2 per Loppin,what is the dollar amount of sales of SPI?

Total working capital rather than changes in working capital has implications for cash flows.

A services firm does all its business in cash only.The firm projects a cash balance of of $4000 in its account after all taxes and costs are paid.The owners plan to invest $7000 and pay a dividend of $1000.How much net new financing is needed?

A firm has $50 million in equity and $20 million of debt,it pays dividends of 30% of net income,and has a net income of $10 million.What is the firm's sustainable growth rate?

XYZ has excess cash of $400,000 and earns 2.5% on excess cash.If XYZ has a corporate tax rate of 30%,what is the free cash flow to the firm?

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 2017?

Use the tables for the question(s)below. Pro Forma Income Statement for Ideko,2010-2015 Pro Forma Balance Sheet for Ideko,2010-2015 -Assuming that Ideko has a EBITDA multiple of 8.5,then the continuation unlevered price-earnings ratio of Ideko in 2015 is closest to:

What is minimum required cash?

________ is the maximum growth rate a firm can achieve without resorting to external financing.

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?

Use the tables for the question(s)below. Pro Forma Income Statement for Ideko,2010-2015 Pro Forma Balance Sheet for Ideko,2010-2015 -Assuming that Ideko has a EBITDA multiple of 8.5,then the continuation equity value of Ideko in 2015 is closest to: