OZAN DUNDAR

Poblem 12-7
INPUTS:
Sales0
$350.00
Growth Rate
20%
Sales
$70.00
Sales1
$420.00
Total Assests (A0)
$122.50
Spontaneous Liabilities (L0) $17.50
Net Income
$10.50
Profit Margin (PM)
3%
Payout Ratio (POR)
40%

Growth is 20% initally. AFN will exceed zero, so 20% excee

sustainable growth. We can use Goal Seek to find the max
without having to use external funds as shown below 6.38

a)
AFN=
AFN=
AFN=

A0*/S0 x (S1 - S0)

$24.50
$13.44

L0*/S0x (S1-S0)
$3.50

PMxS1x(1-POR)
$7.56

b)
Growth=
Growth=
Growth=

M(1-POR) (S0)
$6.30
6.38298%

/
/

A0-L0-M(1-POR)S0
$98.70

c)

Cash
Receivables
Inventories
Total current assets
Net fixed assets
Total assets
Accounts payable
Notes payable
Accruals
Total current liabilities
Mortgage loan
Common stock

Upton Computers
Balance Sheet
December 31, 2011
Forecast
Basis %
Proforma
2011
Proforma
After
2010 Sales
Additions 2011
Financing Financing
$3.50
0.0100
$4.20
$4.20
$26.00
0.0743
$31.20
$31.20
$58.00
0.1657
$69.60
$69.60
$87.50
$105.00
$105.00
$35.00
0.100
$42.00
$42.00
$122.50
$147.00
$147.00
$9.00
$18.00
$8.50
$35.50
$6.00
$15.00

0.0257
0.0243

$10.80
$18.00
$10.20
$39.00
$6.00
$15.00

13.44

$10.80
$31.44
$10.20
$52.44
$6.00
$15.00

Retained earnings
Total liab. and equity

$66.00
$122.50

$7.56

$73.56
$133.56
AFN=13.44

M=
Payout=
NI=
DIV=

3%
40%
$12.60
$5.04

Addition to RE=NI-DIV=

$7.56

$73.56
$147.00

exceed zero, so 20% exceeds the

Goal Seek to find the maximum growth rate
unds as shown below 6.38298%