Exam 18: Financial Modeling and Pro Forma Analysis

Use the information about Billy's Burgers to answer the following question(s): Billy's Burgers -Using the percent of sales method, and assuming 20% growth in sales and no change in interest expense, estimate Billy's Burgers' Pretax Income for 2011.

The amount of dividends a company pays will affect the ________ it has to finance future growth.

Use the table for the question(s) below. Ideko Sales and Operating Cost Assumptions -Based upon Ideko's Sales and Operating Cost Assumptions, what production capacity will Ideko require in 2007?

Internal growth rate assumes that the firm can finance investments via sale of debt.

The estimate of a firm's value at the end of the forecast horizon using a valuation multiple is also called its ________.

Building a model for long-term forecasting reveals points in the future where the firm will have ________.

What is the free cash flow to equity holders for a firm with free cash flow of $11,000, after-tax interest expense of $2,000, and an increase in debt of $2,000?

A firm has $20 million in equity and $20 million of debt, it pays dividends of 20% of net income, and has a net income of $5 million. What is the firm's sustainable growth rate?

The goal of the financial manager is to maximize the value of the shareholders' stake in the firm.

Use the tables for the question(s) below. Pro Forma Income Statement for Ideko, 2010-2015 Pro Forma Balance Sheet for Ideko, 2010-2015 -The amount of net working capital for Ideko in 2010 is closest to ________.

A firm has interest expense of $6,500 each year for ten years. If the tax rate is 35% and the discount rate is 6%, compute the value of the interest rate tax shield.

Use the tables for the question(s) below. Pro Forma Income Statement for Ideko, 2010-2015 Pro Forma Balance Sheet for Ideko, 2010-2015 -Assuming that Ideko has an EBITDA multiple of 8.5, then the continuation EV/Sales ratio of Ideko in 2015 is closest to ________.

A services firm does all its business in cash only. The firm projects a cash balance of $3,000 in its account after all taxes and costs are paid. The owners plan to invest $8,000 and pay a dividend of $1000. How much net new financing is needed?

Use the tables for the question(s) below. Pro Forma Income Statement for Ideko, 2010-2015 Pro Forma Balance Sheet for Ideko, 2010-2015 -Assuming that Ideko has an EBITDA multiple of 9.4, then the continuation enterprise value of Ideko in 2015 is closest to ________.

A firm has interest expense of $2,500 each year for ten years. If the tax rate is 30% and the discount rate is 7%, compute the value of the interest rate tax shield.

Building a model for long-term forecasting reveals points in the future where the firm will need ________ when retained earnings are not enough to fund planned future investments.

The market size for Loppins is 40 million units. If SPI Inc. has a market share of 40% and the average sales price is $3 per Loppin, what is the dollar amount of sales of SPI?

Pledrea Inc. has EBITDA at the forecast horizon of $10,000. Its EBITDA multiple is 12. What is the terminal value of the firm at the forecast horizon?

When making long term plans, any increases in ________ and ________ reflect capital structure decisions that require managers to actively raise capital.

A firm has interest expense of $3,500 each year for ten years. If the tax rate is 35% and the discount rate is 8%, compute the value of the interest rate tax shield.