Finance- S&S Air Minicase

Finance MiniCase: Planning for issue at S&S Air 1. attend the internal developing rate and sustainable proceeds rate for S&S Air. inherent ripening ejaculate out: ROA x b / 1 ROA x b ROA = bread Income/ summarise Assets = 1, 537,452/ 18,308,920 = .084% B= Addition to kept up(p) lucre/ net income= 977,452/ 1,537,452 = .635% Internal growth rate= (.635 * .084) / (1- (.635 * .084)) = .564 This tot up is presentment us that S&S Air mickle cover at a level best rate of .564% per course of instruction without external financing, meaning retained lolly are the provided source of financing. Sustainable Growth Rate: ROE x b / 1- ROE x b ROE = Net Income/ Total beauteousness (roa x em = net income/e) = 1,537,452/ 10,069,920 = .15 SGR= (.635 * .15) / 1- (.635 * .15) = .107 This number is telling us that S&S Air can expand at a maximum rate of .107% per grade without external equity financing. 2.S&S Air is planning for a growth rate of 12 percent n ext year. Calculate the EFN for the guild assuming the company is operating at upright-of-the-moon capacity. Can the companys sales increase at this growth rate?

Pro- Forma Income mastery (12% Growth Rate) Sales$34,159,350 COGS24,891,530 Other4,331,600 Depreciation1,366,680¬¬¬¬___ EBIT3,569,541 Interest478,240_____ nonexempt Income3,091,301 Taxes (40%)1,236,520____ Net Income$1,854,780 Dividends675,583 Add to RE1,179,197 Pro-Forma Balance sheet (12 % Growth Rate) Assets Liabilities & Equity Current Assets Current Liabilities Cash $ 493,920 Accounts collectable $ 995,680 ! Accounts rec. 793,408 Notes Payable 2,030,000 descent 1,161,574 Total CL $ 3,025,680 Total CA $ 2,448,902 long-term debt $ 5,320,000 shareholder Equity Common stock $ 350,000 Fixed assets retained earnings 10,899,117 Net PP&E $...If you want to get a full essay, order it on our website: OrderCustomPaper.com

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