Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. the table given below summarizes the 2017 income s

The table given below summarizes the 2017 income statement and end-year balance sheet of Jonathans...

70.2K

Verified Solution

Question

Finance

The table given below summarizes the 2017 income statement and end-year balance sheet of Jonathans Bowling Alleys. Jonathans financial manager forecasts a 10% increase in sales and costs in 2018. The ratio of sales to average assets is expected to remain at 0.40. Interest is forecasted at 5% of debt at the start of the year.

Income Statement
$ in thousands
Sales $ 1,000 (40% of average assets)a
Costs 750 (75% of sales)
Interest 25 (5% of debt at start of year)b
Pretax profit 225
Tax 90 (40% of pretax profit)
Net income $ 135

aAssets at the end of 2016 were $2,400,000.

bDebt at the end of 2016 was $500,000.

Balance Sheet
$ in thousands
Net assets $ 2,600 Debt $ 500
Equity 2,100
Total $ 2,600 Total $ 2,600

What is the implied level of assets at the end of 2018?

Note: Enter your answer in dollars not in thousands.

If the company pays out 50% of net income as dividends, how much cash will Jonathan need to raise in the capital markets in 2018? Assumes debt remains constant.

Note: Enter your answer in dollars not in thousands.

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students