Essay About 1996Net Sales And Tipton Caseexhibit 2Income Statement

Tipton Case Study
Essay Preview: Tipton Case Study
Report this essay
Tipton CaseExhibit 2Income Statement (000s) 1995 1996Net Sales $100,000  = 100,000 *1.25 $125,000 Cost of Goods 79,000 Given 93,750  98,750.00 Gross Profit 21,000  31,250 0.256.50Administrative & Selling Expenses 10,000  = 10,000 * 1.2 12,000 Depreciation 600 Given 600 Miscellaneous 200 Given 220 EBIT 10,200  18,430 Interest –    –   Earnings Before Taxes 10,200  18,430 Taxes 5,100  = 18,430 * 0.5 9,215 Net Income 5,100  9,215 Dividends 2,550  = Net Income / 2 4,608 To retained earnings 2,550  4,608 Exhibit 2Balance Sheet (000s) 1995 1996AssetsCash & marketable securities $3,000   = 125,000 * .02  $2,500 Accounts receivable 8,000 Average Collection Period (Average of last ones) /365 * New Sales 10,388 Inventory 11,500   = 125,000 / 6.5  19,231 Current Assets 22,500  32,119 Gross Fixed Assets 24,000   = 24,000 + 5,000 of new Plant and Equipment  29,000 Accumulated Depreciation (4,000)Given (4,600)Net Fixed Assets 20,000  24,400 Total Assets 42,500  56,519 Liabilities and EquityNotes Payable –    –   Accounts Payable 9,500  = A P * 1.25 (Sales Growth) 11,400 Accruals 3,000  = Accruals * 1.25 (Sales Growth) 3,750 Current Liabilities 12,500  15,150 Bonds –    –   Common Stock ($10 par) 20,000   = Common Stock 1995 * 1.25  25,000 Retained Earnings 10,000   = Retained Earnings 1995 + 4,607.5  14,608 Total Liabilities and Equity 42,500  54,758  Check  –   -1,761