70.2K

Verified Solution

Link Copied!

Comparative financial information of Saco World is shown below: \begin{tabular}{|c|c|c|} \hline Income Statement & Yr. 2022 & Yr. 2021 \\ \hline Net Sales & $15,326 & $12,494 \\ \hline Cost of Goods & 12,267 & 10,101 \\ \hline \begin{tabular}{|l|} Gross Profit \\ \end{tabular} & 3,059 & 2,393 \\ \hline Selling, general and administrative expense & 2,251 & 1,728 \\ \hline Depreciation and amortization expense & 167 & 103 \\ \hline Income before tax & 641 & 562 \\ \hline Income tax expense & 245 & 215 \\ \hline Net income & S396 & S347 \\ \hline Outstanding Shares & 208 & 200 \\ \hline Balance Sheet & Yr. 2022 & Yr. 2021 \\ \hline Cash & $746 & $751 \\ \hline Receivables & 313 & 262 \\ \hline \begin{tabular}{|l|} Inventories \\ \end{tabular} & 1,767 & 1,184 \\ \hline Other current assets & 102 & 41 \\ \hline Total current assets & 2,928 & 2,238 \\ \hline Property, plant \& equipment & 1,987 & 1,093 \\ \hline Accumulated depreciation & 543 & 395 \\ \hline Net property, plant and equipment & 1,444 & 698 \\ \hline Other noncurrent assets & 466 & 59 \\ \hline Total assets & $4838 & $2995 \\ \hline Accounts payable \& accrued liabilities & 2,473 & 1,704 \\ \hline Short-term debt and current maturities of long-term debt & 114 & 16 \\ \hline Income tax liabilities & 127 & 65 \\ \hline \begin{tabular}{|l} Total current liabilities \\ \end{tabular} & 2,714 & 1,785 \\ \hline \begin{tabular}{|l|} Long-term liabilities \\ \end{tabular} & 122 & 100 \\ \hline \begin{tabular}{|l|} Long-term debt \\ \end{tabular} & 181 & 15 \\ \hline Total long-term liabilities & 303 & 115 \\ \hline Common stock & 20 & 20 \\ \hline Capital surplus & 576 & 247 \\ \hline Retained earnings & 1,225 & 828 \\ \hline Shareholders' equity & 1,821 & 1,095 \\ \hline Total liabilities and equity & S 4838 & $2995 \\ \hline \end{tabular} a) Use the following ratios to prepare a projected income statement, balance sheet, and statement of cash flows for Year 3. b) Based on your initial projections, how much external financing (long-term debt and/or stockholders' equity) will Saco World need to fund its growth at projected increases in sales

Answer & Explanation Solved by verified expert

See Answer