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Financial Planning and Forecasting for Rologene Company: Module 2 Problem Set

A financial planning and forecasting assignment focused on Rologene Company.

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Financial Planning and Forecasting for Rologene Company: Module 2Problem SetProblem Set for Module 2The Rologene Company200X Balance SheetAssetsLiabilitiesAccounts Payable35,000Cash40,000Accruals25,000Marketable Securities10,000Current Note Payable20,000Accounts Receivable70,000Total Current Liabilities80,000Inventory80,000Bonds240,000Total Current Assets200,000Total Liabilities320,000Property Plant &Equipment220,000Retained Earnings40,000Total Assets420,000Common Stock60,000Total Liabilities and Equity420,000Other Information:•200X sales = $800,000•200X profit margin = 5%•200X payout ratio = 35%Assumptions for 200Y:•Expected change in sales (ΔS) = $200,000•200X profit margin and payout ratios will be in effect in 200Y•Property, Plant, and Equipment (fixed assets) are expected toincrease by $90,000•Depreciation expense for 200Y = $20,000•Company holds marketable securities in a semi-permanent savingsaccount•The Current Note Payable will not be rolled-over and is to be paidoff in year 200Y1.Prepare the EFN equation for the Rologene Company using the information above.Show your work, label your computations and clearly mark your answer.To calculate the External Financing Needed (EFN), we use the following equation:Given the data, here's how we break it down:

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