Global Corp. expects sales to grow by 7% next year. Using the percent of sales method and the data provided in the given tables LOADING... , forecast: a. Costs except depreciation b. Depreciation c. Net income d. Cash e. Accounts receivable f. Inventory g. Property, plant, and equipment h. Accounts payable (Note: Interest expense will not change with a change in sales. Tax rate is 26%.) The Tax Cuts and Jobs Act of 2017 temporarily allows 100% bonus depreciation (effectively expensing capital expenditures). However, we will still include depreciation forecasting in this chapter and in these problems in anticipation of the return of standard depreciation practices during your career. Income Statement Net Sales 185.3 Costs Except Depreciation -175.4 EBITDA 9.9 Depreciation and Amortization -1.2 EBIT 8.7 Interest Income (expense) -7.7 Pretax Income 1 Taxes (26%) -0.3 Net Income 0.7 Balance Sheet Assets Cash 23.4 Accounts Receivable 18.1 Inventories 15.9 Total Current Assets 57.4 Property, Plant and Equipment 112.8 Total Assets 170.2 Liabilities and Equity Accounts Payable 34.2 Long-term Debt 113.9 Total Liabilities 148.1 Total Stockholders' Equity 22.1 Total Liabilities and Equity 170.2

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter6: Accounting For Financial Management

Section: Chapter Questions

Problem 3P

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Question

Global Corp. expects sales to grow by

next year. Using the percent of sales method and the data provided in the given tables

forecast:

a. Costs except depreciation

b. Depreciation

c. Net income

d. Cash

e. Accounts receivable

f. Inventory

g. Property, plant, and equipment

h. Accounts payable

(Note:

Interest expense will not change with a change in sales. Tax rate is

26%.)

The Tax Cuts and Jobs Act of 2017 temporarily allows 100% bonus depreciation (effectively expensing capital expenditures). However, we will still include depreciation forecasting in this chapter and in these problems in anticipation of the return of standard depreciation practices during your career.

Income Statement
Net Sales 185.3
Costs Except Depreciation -175.4
EBITDA 9.9
Depreciation and Amortization -1.2
EBIT 8.7
Interest Income (expense) -7.7
Pretax Income 1
Taxes (26%) -0.3
Net Income 0.7

Balance Sheet
Assets
Cash 23.4
Accounts Receivable 18.1
Inventories 15.9
Total Current Assets 57.4
Property, Plant and Equipment 112.8
Total Assets 170.2

Liabilities and Equity
Accounts Payable 34.2
Long-term Debt 113.9
Total Liabilities 148.1
Total Stockholders' Equity 22.1
Total Liabilities and Equity 170.2

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