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Author Question: CN Railways is North America's fifth largest railway. Forecast the financial statements for CN for ... (Read 60 times)

Arii_bell

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CN Railways is North America's fifth largest railway. Forecast the financial statements for CN for Year 11. Use the percent of sales method based on Year 10 and the assumptions listed below. Please note the ratios to sales provided in the table which are useful for making the forecast.
Sales growth of 10%. The cost of debt is 4.59%. The tax rate is 31.943%. The depreciation rate is 3%. CAPEX is $1,600 Million. The following accounts are constant: Intangible assets, Deferred taxes, and Common Stock. Long term debt is the PLUG variable. No dividends.
Forecast the financial statements for CN. What are the additional funds needed (AFN) in Year 11? The AFN is the change in the plug account from Year 10 to Year 11.

CN Railway Company
Income Statement and Balance Sheet
As of December 31, Year 10 ($ 000,000s)
Year 10RatiosForecast
Revenue $6,110 $6,721 
COGS2,5500.417349
Dep. Exp.499
SG&A1,9450.318331
EBIT1,116
Int. Exp.277
Income before Taxes 839
Income Taxes 268
Net income$571
ASSETSYear 10RatiosForecast
Total Current Assets1,1630.190344
PP&E16,898
Intangible assets863863
Total assets  $18,924 
Total Current liabilities2,1340.349264 
Deferred Taxes5,1605,160
Long-term debt 5,003
Common Stock3,5583,558
Retained earnings 2,762
Total Owners Equity6,627
Total liabilities and Owners equity 18,924 

◦ $64 million
◦ $165 million
◦ $342 million
◦ $580 million
◦ $965 million


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Marked as best answer by Arii_bell on Apr 25, 2021

macybarnes

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Arii_bell

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Reply 2 on: Apr 25, 2021
YES! Correct, THANKS for helping me on my review


at

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Reply 3 on: Yesterday
Thanks for the timely response, appreciate it

 

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