Garlington Technologies Inc.'s 2016 financial statements are shown below: Balance Sheet as of December 31, 2016 Cash $ 180,000 Accounts payable $ 360,000 Receivables 360,000 Notes...

3.7 Ratings (619 Votes)


		X	Y=X/3600000
		2016(actual)	% of Sales	2017 (Forecast)
A	Sales	$3,600,000	100%	$4,140,000	(3600000*1.15)
B	Operating costs	$3,279,720	91%	$3,771,678	(91%*4140000)
C=A-B	EBIT	$320,280	9%	$368,322
D	Interest	$18,280	1%	$20,280	(156000*13%)
E=C-D	Pre-tax earnings	$302,000	8%	$348,042
F=E*40%	Taxes (40%)	$120,800	3%	$139,217
G=E-F	Net income	$181,200	5%	$208,825
H	Dividends:	$108,200	3%	$192,000
I=G-H	Addition to RE:	$73,000	2%	$16,825


		2016(Actual)	2017(Forecast)
	Cash	$180,000	$207,000	(180000*1.15)
	Receivables	$360,000	$414,000	(360000*1.15)
	Inventories	$720,000	$828,000	(720000*1.15)
	Total current assets	$1,260,000	$1,449,000
	Fixed assets	$1,440,000	$1,656,000	(1440*1.15)
	Total assets	$2,700,000	$3,105,000
	Accounts payable	$360,000	$414,000	(360000*1.15)
	Notes payable	$156,000	$463,175
	Accruals	$180,000	$207,000	(180000*1.15)
	Total current liabilities	$696,000	$1,084,175
	Common stock	$1,800,000	$1,800,000
	Retained earnings	$204,000	$220,825	(204000+16825)
	Total liabilities and equity	$2,700,000	$3,105,000

	Additional Financing Need	$307,175	(463175-156000)

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Cash	$ 180,000	Accounts payable	$ 360,000
Receivables	360,000	Notes payable	156,000
Inventories	720,000	Line of credit	0
Total current assets	$1,260,000	Accruals	180,000
Fixed assets	1,440,000	Total current liabilities	$ 696,000
		Common stock	1,800,000
		Retained earnings	204,000
Total assets	$2,700,000	Total liabilities and equity	$2,700,000

Garlington Technologies Inc. Pro Forma Income Statement December 31, 2017
Sales		$
Operating costs		$
EBIT		$
Interest		$
Pre-tax earnings		$
Taxes (40%)		$
Net income		$
Dividends:		$
Addition to RE:		$

Garlington Technologies Inc. Pro Forma Balance Statement December 31, 2017
Cash		$
Receivables		$
Inventories		$
Total current assets		$
Fixed assets		$
Total assets		$
Accounts payable		$
Notes payable		$
Accruals		$
Total current liabilities		$
Common stock		$
Retained earnings		$
Total liabilities and equity		$

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