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Gandaki Company's Balance sheet 2024 are given below: Assets Amount (Rs) Liabilities and Equity Amount (Rs) Cash 200,000 Accounts payable 100,000…

BBS Fundamentals of Corporate Finance · 2082 · Solved Question with Answer

Gandaki Company's Balance sheet 2024 are given below:

Assets Amount (Rs) Liabilities and Equity Amount (Rs)
Cash 200,000 Accounts payable 100,000
Account receivables 400,000
Inventories 200,000 Accruals 300,000
Total current assets 800,000 Total current liabilities 400,000
Net fixed assets 12,00,000
Common stock 10,00,000
Retained earning 600,000
Total Assets 20,00,000 Total Liabilities & Equity 20,00,000

Suppose sales are expected to increase from Rs. 40,00,000 in 2024 to Rs. 60,00,000 in 2025. Firms after tax profit margin is forecasted 10 percent and its payout ratio will be 70 percent.

a. What will be firm's additional fund needed for the year 2025 if company is ruuning at full capacity? Use AFN equation.
b. Prepare Gandaki company's pro-froma balance sheet as of December 31, 2025

Solution

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