Questions Have to make your answers with two (2) decima digits, e.g. 3.45%, 1.235, $1.234.56, etc) 1. Data of the 2017 balance sheet and income state for Fatimah Co. are as below. Answer the following questions (5 marks) Balance Sheet Cash 77,500 129,000 Account parable Notes payable Receivables 336,000 84,000 Inventories 241,500 Accruals 117,000 655,000 330,000 256,500 292,500 250,000 947.500 111,000 947,500 Total current liabiliti Total current assets Long-term deb Net fixed assets Common equity Total mets Retained Earnings Total liabilities & equit Sales 1,607,500 1,392,500 Cost of good sold Gross profit 215,000 Selling expenses 115,000 General and administrative expenses 30,000 Earning before interest and taxes (EBIT) 70,000 Interest expense 24,500 Earning before taxes (EBT) 45,500 Federal and state income taxes (40%) 18,200 Net income 27,300 BASIC (1) Construct the basic and extended Du Pont equation for the company. EXTENDED: Page University ID# Student Name: (i) Calculate the indices indicated below for the company in 2017. (a) TIE (times interest earned) (b) Quick ratio. 2. Refer to the Question 1 above with the same financial statements and assume that the company is forecasting a 20% increase in sales this year, cost and expenses are changing proportionally with sales but the tax rate (40 %), interest expense, and dividend payout ratio (30%) are all expected to remain constant, and the firm is operating at full capacity in 2017. Answer the following questions according to the financial statement method of the percentage of sales financial forecasting approach. (10 marks) (1) What will be the Fatimah's projected addition to retained earnings in 2018?? (ii) What is Fatimah's AFN (additional funds needed) in 2018? (i) What is the operating capital for each year (2017 and 2018)? (iv) How much free cash flow is expected to be generated in 2018? 3. Refer to Question 2 above with the same financial statements in 2017 (in Question 1), and assume that the company's fixed assets are currently operating at 80% of capacity. Answer the following questions. (5 marks) (1) What level of sales could it have obtained if it had been operating at full capacity? (ii) What is Fatimah's target fixed asset/sales ratio? (iii) If Fatimah's sales increased 30%, how large of increase in fixed assets would the company need in order to meet its target fixed assets/sales ratio?