In 2015,Inglis Arctic Sports (IAS)had Total Sales of $35 Million

Essay

In 2015,Inglis Arctic Sports (IAS)had total sales of $35 million.The firm earned $3.00 per share and paid dividends of $1.00 per share.There are 1 million shares currently outstanding.The 2015 year-end balance sheet is shown below:
Inglis Arctic Sports
Consolidated Balance Sheet
(at year end in thousands of dollars)

You are a financial analyst with IAS and have been asked to prepare a financial plan for next year.You have been given the following information and projections for 2016 from the marketing and production departments:
•Sales are projected to grow by 15 percent in 2016.
•New capital expenditures will be $3.75 million for the replacement of a production line.
•Depreciation expense of $1,200,000 will be recorded in 2016.
•The new more efficient production line is expected to result in an inventory increase of only 7.5 percent from 2015 levels.
•Management would like to achieve a total debt-to-equity ratio of 1.0 in 2016,while keeping long-term debt unchanged from 2015.
•Management expects the net profit margin and dividend payout ratios to remain the same as in 2015.
Forecast the 2016 balance sheet for IAS.