Koshi Company's balance sheet is given below: Balance Sheet as of December 31, 2024 Cash Rs. 100,000 Accounts payable Rs. 50,000 Account receivable…
BBS Fundamentals of Corporate Finance · 2081 · Solved Question with Answer
Koshi Company's balance sheet is given below:
| Balance Sheet as of December 31, 2024 | |||
| Cash | Rs. 100,000 | Accounts payable | Rs. 50,000 |
| Account receivable | 200,000 | Accruals | 150,000 |
| Inventory | 100,000 | ||
| Total current assets | Rs. 400,000 | Total current liabilities | Rs. 200,000 |
| Net fixed assets | 600,000 | Common stock | 500,000 |
| Retained earnings | 300,000 | ||
| Total assets | Rs. 1,000,000 | Total liabilities and equity | Rs. 1,000,000 |
Sales are expected to increase from Rs 2,000,000 in 2024 to Rs 3,000,000 in 2025. Firm's after-tax profit margin is forecasted to be 10 percent and its payout ratio will be 80 percent.
a. What is the firm's additional fund needed for the year 2025 if company is running at full capacity? Use AFN equation.
b. Prepare Koshi Company's pro-forma balance sheet of as of December 31, 202