786 Part Nine Financial Planning and Working Capital Management
bre44380_ch29_759-786.indd 786 10/06/15 09:53 AM
Income Statement
Revenue $1,785
Fixed costs 53
Variable costs (80% of revenue) 1,428
Depreciation 80
Interest (at 11.8%) 24
Taxes (at 40%) 80
Net income $ 120
Balance Sheet, Year-End
2016 2015
Assets:
Net working capital $ 400 $ 340
Fixed assets 800 680
Total assets $1,200 $1,020
Liabilities:
Debt $ 240 $ 204
Book equity 960 816
Total liabilities $1,200 $1,020
Sources and Uses
Sources:
Net income $120
Depreciation 80
Borrowing 36
Stock issues 104
Total sources $340
Uses:
Increase in net working capital $ 60
Investment 200
Dividends 80
Total uses $340❱ TABLE 29.19^ Financial statements for Executive Cheese Company, 2016 (figures in
thousands).Look up the financial statements for any company on finance.yahoo.com. Make some plausible
forecasts for future growth and the asset base needed to support that growth. Then use a spread-
sheet program to develop a five-year financial plan. What financing is needed to support the
planned growth? How vulnerable is the company to an error in your forecasts?● ● ● ● ●
FINANCE ON
THE WEB