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Peabody Peabody Balance Sheet December 31 2015 (000)

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Peabody Peabody Balance Sheet December 31 2015 (000);Pro forma balance sheet Peabody & Peabody has 2015 sales of $10 million. It;wishes to analyze expected performance and financing needs for 2017, which is;2 years ahead. Given the following information, respond to parts a and b.;(1) The percents of sales for items that vary directly with sales are as follows;Accounts receivable, 12%;Inventory, 18%;Accounts payable, 14%;Net profit margin, 3%;(2) Marketable securities and other current liabilities are expected to remain;unchanged.;(3) A minimum cash balance of $480,000 is desired.;(4) A new machine costing $650,000 will be acquired in 2016, and equipment;costing $850,000 will be purchased in 2017. Total depreciation in 2016 is;forecast as $290,000, and in 2017 $390,000 of depreciation will be taken.;(5) Accruals are expected to rise to $500,000 by the end of 2017.;(6) No sale or retirement of long-term debt is expected.;(7) No sale or repurchase of common stock is expected.;(8) The dividend payout of 50% of net profits is expected to continue.;(9) Sales are expected to be $11 million in 2016 and $12 million in 2017.;(10) The December 31, 2015, balance sheet follows.;Peabody & Peabody Balance Sheet December 31, 2015 ($000);Assets Liabilities and stockholders? equity;Cash $ 400 Accounts payable $1,400;Marketable securities 200 Accruals 400;Accounts receivable 1,200 Other current liabilities 80;Inventories 1,800 Total current liabilities $1,880;Total current assets $3,600 Long-term debt 2,000;Net fixed assets 4,000 Total liabilities 3,880;Total assets $7,600 Common equity 3,720;Total liabilities and;stockholders? equity $7,600;a. Prepare a pro forma balance sheet dated December 31, 2017.;b. Discuss the financing changes suggested by the statement prepared in part a.

 

Paper#29392 | Written in 18-Jul-2015

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