Calculating EFN
Based on the following information for the Skandia Mining Company, what is EFN if sales are predicted to grow by 10 percent? Use the percentage of sales approach and assume the company is operating at full capacity. The payout ratio is constant.
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SKANDIA MINING COMPANY Financial Statements |
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Income Statement |
Balance Sheet |
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Assets |
Liabilities and Owners’ Equity |
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Sales |
$4,250.0 |
Current assets |
$ 900.0 |
Current liabilities |
$ 500.0 |
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Costs |
3,875.0 |
Net fixed assets |
2,200.0 |
Long term debt |
1,800.0 |
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Taxable income |
$ 375.0 |
Total |
$3,100.0 |
Owners’ equity |
800.0 |
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Taxes (34%) |
127.5 |
Total liabilities and |
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Net income |
$ 247.5 |
owners’ equity |
$3,100.0 |
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Dividends |
$ 82.6 |
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Addition to retained earnings |
164.9 |
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