Chapter 4
Problems 1-32
Input boxes in tan
Output boxes in yellow
Given data in blue
Calculations in red
Answers in green
Chapter 4
Question 1,2
Input area:
Output area:
Pro forma income statement
Equity increase 2,925$
Pro forma income statement
Income statement
Pro forma balance sheet
Pro forma balance sheet
Balance sheet
Sales increase 15%
Payout rate 50%
Chapter 4
Question 3
Input area:
Output area:
Percent increase in sales 19.00%
Pro forma income statement Pro forma balance sheet
Next year’s sales 8,449$
Chapter 4
Question 4
Input area:
Output area:
Percent increase in sales 15%
Pro forma income statement Pro forma balance sheet
Add. To RE 3,634.00$
Dividend paid 2,300$
Next year’s sales 30,360$
Tax rate 40%
Chapter 4
Question 5
Input area:
Output area:
Pro forma income statement Pro forma balance sheet
Taxable income 1,725.00$ Equity 6,733.10
Add. To RE 683.10$
Taxable income 1,500$ Equity 6,050
Payout ratio 40%
Sales increase 15%
Tax rate 34%
Chapter 4
Question 6,7
Input area:
Output area:
Taxable income 5,700.00$
Add. To RE 2,394.00
Return on assets 8.74%
Retention ratio 70%
Return on equity 15.80%
Payout ratio 30%
Tax rate 40%
Chapter 4
Question 8
Input area:
Output area:
Return on equity 13.55%
Retention ratio 70%
Sustainable growth rate 10.48%
Payout ratio 30%
Tax rate 34%
Chapter 4
Question 9
Input area:
Output area:
Pro forma income statement
Taxable income 18,840.00$
Payout ratio 24.50%
Taxable income 15,700$
Addition to RE 7,705$
Tax rate 35%
Increase in sales 20%
Chapter 4
Question 10
Input area:
Output area:
Chapter 4
Question 11
Input area:
Output area:
Payout ratio 0.24
Pro forma income statement
Taxable income 18,055.00$
Add. To RE 8,860.75
HEIR JORDAN CORPORATION
Balance Sheet
Current assets Current liabilities
Cash 3,392.50$ Accounts payable 2,760.00$
Accounts Receivable 4,715.00
Inventory 7,360.00 Total 8,160.00$
Fixed assets
Net plant and equipment 47,495.00$ Owners’ equity
Accounts receivable 4,100
Net plant and equipment 41,300
Accounts payable 2,400
Notes payable 5,400
Long-term debt 28,000
Common stock 15,000
Retained earnings 3,950
Net income 12,246
Increase in sales 15%
Tax rate 35%
Chapter 4
Question 12
Input area:
Output area:
Plowback ratio 75%
Return on assets 7%
Payout ratio 25%
Chapter 4
Question 13
Input area:
Output area:
Plowback ratio 70%
Return on equity 14%
Payout ratio 30%
Chapter 4
Question 14
Input area:
Output area:
Return on equity 15.15%
Plowback ratio 72.92%
Profit margin 7.1%
Capital intensity ratio 0.75
Debt-equity ratio 0.60
Net income 48,000$
Chapter 4
Question 15
Input area:
Output area:
Return on equity 21.06%
Plowback ratio 65.00%
Total asset turnover 2.70
Profit margin 6.5%
Equity multiplier 1.20
Payout ratio 35%