The most recent balance sheet and income statement for JPX (2020) is provided in the attached spreadsheet (sheet Q1). The target sales growth rate for 2021 is 15%. All spontaneous assets as well as spontaneous liabilities are expected to grow with sales. Assume the firm is operating at full capacity. Information on operating and financing assumptions are provided in the attached spreadsheet. Further, partially completed projected balance sheet and income statement for 2021 are also included.

1. Using the percent sales method of financial forecasting, project the remaining balance sheet and income statement items for 2021 assuming any additional funds needed are obtained by issuing long-term debt. Estimate the Additional Financing Needs (AFN) for 2021?
2. Estimate the free cash flows for 2021

Conduct a Dupont Analysis for 2021

Operating and Financing Assumptions

Sales Growth 15.00%

Tax Rate 20.00%

Payout Ratio 40.00%

Operating Income/Sales22.67%

Cash/Sales2.12%

AR/Sales3.18%

Inventories/Sales6.14%Income Statement 20202021

Net Fixed Assets/Sales158.90%Sales $ 4,720 $ 5,428

Acc Payable/Sales9.53%Cost of Goods Sold $ 3,050

Accrual/Sales 8.47% Selling General and Admin Expense $ 200

Cost of Borrowing for short and long term debt 14%Depreciation $ 400

Source of External Financing -Plug itemLong Term Debt EBIT $ 1,070 $ 1,231

Interest Expense $ 350

Earnings Before Taxes $ 720

Part A- Estimate AFN using Financial Forecasting MethodNet Income $ 576

Part B- Estimate Free Cash Flow to Firm in 2021Dvidends $ 230

Part C- Conduct Du Pont Analysis for 2021Addition to Retained Earnings $ 346

Actual Projected

Balance Sheet 20202021

Surplus Cash $ -

Cash $ 100 $ 115.00

Acc Receivable $ 150

Inventory $ 290 $ 333.50

Total Current Assets $ 540

Net Fixed Assets $ 7,500

Total Assets $ 8,040

Liab + Shareholder Equity

Accounts Payable 450

Accruals 400 $ 460.00

Notes Payable $ 690 $ 690.00

Total Current Liab1,540

Long Term Debt 2,000

Common Stock 3,050 $3,050.00

Retained Earnings 1,450

Total Liab +SE8,040

Proj Assets

Proj Liab

AFN

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