As CFO of FINC LLC, you forecast company’s growth for the year 2018: Sales, all
ID: 2808807 • Letter: A
Question
As CFO of FINC LLC, you forecast company’s growth for the year 2018:
Sales, all income statement items and Assets will grow by the same percentage;
The firm will grow in 2018 with internally generated capital ONLY, without taking on any additional external financing, neither debt nor equity;
No dividend payout is expected in 2018.
1) Find this Internal Growth Rate.
2) Use this growth rate to complete 2018 financial statements. Ensure the numbers add up.
FINC LLC
Financial Statements
Income Statement
Balance Sheet
2017
Projected 2018
2017 End
2018 End projected
2017 End
2018 End projected
Sales
$1,000
Assets
$2,520
Debt
$1,200
Costs
850
Taxable income
150
Equity
$1,320
Taxes (20%)
30
Net income
$120
Total
$2,520
Total
$2,520
FINC LLC
Financial Statements
Income Statement
Balance Sheet
2017
Projected 2018
2017 End
2018 End projected
2017 End
2018 End projected
Sales
$1,000
Assets
$2,520
Debt
$1,200
Costs
850
Taxable income
150
Equity
$1,320
Taxes (20%)
30
Net income
$120
Total
$2,520
Total
$2,520
Explanation / Answer
Net income for 2017 is 120
Equity at the end of 2018 is 1320
Equity before profit is 1320-120 = 1200
Growth rate in Company = 120/1200 = 10%
Projected finacial statement for 2018
FINC LLC Financial Statements Income Statement Balance Sheet Year 2017 2018 2017 2018 2017 2018 Sales 1000 1100 Assets 2520 2772 Debt 1200 1320 Costs 850 935 Equity 1320 1452 Taxable income 150 165 Taxes 20% 30 33 Net Income 120 132 2520 2772 2520 2772Related Questions
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