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Problem 5 (15 marks) You have been provided the following financial statements for Big XTC Company. Big XTC Co. Balance Sheet ($ 000's) Forecast ASSETS 2018 2019 2020 Current Assets Cash 9,000 7,282 14,000 Short-term Investments 48,600 20,000 71,632 Accounts Receivable 351,200 632,160 878,000 Inventory 1,287,360 Total Current Assets 1,124,000 1,946,802 2,680,112 Plant & Equipment 491,000 1,202,950 1,220,000 Accumulated Depreciation 146,200 383,160 Net Plant & Equipment 344,800 939,790 836,840 TOTAL ASSETS 1,468,800 2,886,592 3,516,952 LIABILITIES and SHAREHOLDERS' EQUITY Current Liabilities Accounts Payable 145,600 324,000 359,800 Notes Payable 200,000 720,000 300,000 Accrued Expenses 136,000 284,960 380,000 Total Current Liabilities 481,600 1,328,960 1,039,800 Long Term Debt 323,432 1,000,000 500,000 Common Shares 460,000 460,000 1,680,936 Retained Earnings 203,768 97,632 296,216 Total Equity 663,768 557,632 1,977,152 TOTAL LIABILITIES AND EQUITY 1,468,800 2,886,592 3,516,952 Income Statement ($000's) 2019 Sales Revenues Cost of Goods Sold Contribution Margin Operating Expenses Depreciation Interest Earnings B4 Taxes Taxes @ 40% Earnings After tax Other Data that may be helpful Stock Price Shares o/s EPS DPS Tax Rate Book Value per Share Lease Payments 2018 3,432,000.0 5,834,400.0 2,864,000.0 4,980,000.0 568,000.0 854,400.0 340,000.0 720,000.0 18,900.0 116,960.0 62,500.0 176,000.0 146,600.0 - 158,560.0 58,640.0 - 63,424.0 87,960.0 - 95,136.0 Forecast 2020 7,035,600.0 5,800,000.0 1,235,600.0 612,960.0 120,000.0 80,000.0 422,640.0 169,056.0 253,584.0 $ 8.50 $ 100,000 0.880 $ 0.220 $ 40% 6.638 $ 40,000 $ 6.00 $ 100,000 0.951 $ 0.110 $ 40% 5.576 $ 40,000 $ 12.17 250,000 1.014 0.220 40% 7.909 40,000 Forecast Industry Average 2.7 1.0 6.1 32.0 7.0 2.3 0.8 4.8 37.3 10.0 2.3 54.8 Ratios Current Quick Inventory Turnover Day's Sales Outstanding Fixed Assets Turnover Total Asset Turnover Total Debt Ratio TIE Ratio Profit Margin Ratio Return on Assets Return on Equity Price Earnings Ratio Price/Cash Flow 2.5 1.5 0.5 4.5 69.6 6.2 2.0 80.7 0.1 -1.6% -3.3% - 17.1% N/A 27.5 50.0 6.2 3.3 3.6% 2.6% 6.0% 13.3% 9.7 8.0 9.0% 17.9% 16.2 7.6 a. Prepare the cash flow statement for the 2020 forecast. (5 marks) b. Prepare the sources and uses statement for the 2020 forecast. (5 marks) c. Prepare the cash flow identity statement for the 2020 forecast. (5 marks) Problem 5 (15 marks) You have been provided the following financial statements for Big XTC Company. Big XTC Co. Balance Sheet ($ 000's) Forecast ASSETS 2018 2019 2020 Current Assets Cash 9,000 7,282 14,000 Short-term Investments 48,600 20,000 71,632 Accounts Receivable 351,200 632,160 878,000 Inventory 1,287,360 Total Current Assets 1,124,000 1,946,802 2,680,112 Plant & Equipment 491,000 1,202,950 1,220,000 Accumulated Depreciation 146,200 383,160 Net Plant & Equipment 344,800 939,790 836,840 TOTAL ASSETS 1,468,800 2,886,592 3,516,952 LIABILITIES and SHAREHOLDERS' EQUITY Current Liabilities Accounts Payable 145,600 324,000 359,800 Notes Payable 200,000 720,000 300,000 Accrued Expenses 136,000 284,960 380,000 Total Current Liabilities 481,600 1,328,960 1,039,800 Long Term Debt 323,432 1,000,000 500,000 Common Shares 460,000 460,000 1,680,936 Retained Earnings 203,768 97,632 296,216 Total Equity 663,768 557,632 1,977,152 TOTAL LIABILITIES AND EQUITY 1,468,800 2,886,592 3,516,952 Income Statement ($000's) 2019 Sales Revenues Cost of Goods Sold Contribution Margin Operating Expenses Depreciation Interest Earnings B4 Taxes Taxes @ 40% Earnings After tax Other Data that may be helpful Stock Price Shares o/s EPS DPS Tax Rate Book Value per Share Lease Payments 2018 3,432,000.0 5,834,400.0 2,864,000.0 4,980,000.0 568,000.0 854,400.0 340,000.0 720,000.0 18,900.0 116,960.0 62,500.0 176,000.0 146,600.0 - 158,560.0 58,640.0 - 63,424.0 87,960.0 - 95,136.0 Forecast 2020 7,035,600.0 5,800,000.0 1,235,600.0 612,960.0 120,000.0 80,000.0 422,640.0 169,056.0 253,584.0 $ 8.50 $ 100,000 0.880 $ 0.220 $ 40% 6.638 $ 40,000 $ 6.00 $ 100,000 0.951 $ 0.110 $ 40% 5.576 $ 40,000 $ 12.17 250,000 1.014 0.220 40% 7.909 40,000 Forecast Industry Average 2.7 1.0 6.1 32.0 7.0 2.3 0.8 4.8 37.3 10.0 2.3 54.8 Ratios Current Quick Inventory Turnover Day's Sales Outstanding Fixed Assets Turnover Total Asset Turnover Total Debt Ratio TIE Ratio Profit Margin Ratio Return on Assets Return on Equity Price Earnings Ratio Price/Cash Flow 2.5 1.5 0.5 4.5 69.6 6.2 2.0 80.7 0.1 -1.6% -3.3% - 17.1% N/A 27.5 50.0 6.2 3.3 3.6% 2.6% 6.0% 13.3% 9.7 8.0 9.0% 17.9% 16.2 7.6 a. Prepare the cash flow statement for the 2020 forecast. (5 marks) b. Prepare the sources and uses statement for the 2020 forecast. (5 marks) c. Prepare the cash flow identity statement for the 2020 forecast

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