Please help to resolve these items. Shareholders' Equity (1) Common stock, par value £1. It refers to the Book Value of
Posted: Wed May 18, 2022 11:27 pm
Please help to resolve these items.
Shareholders' Equity (1) Common stock, par
value £1. It refers to the Book Value of Common Equity.
For 2021 BV of Common Shares, we can assume that it is as the
same as 2020 value.
According to the buyout plan, Diamond equity would purchase
Sports World’s remaining 5,197,000 shares in 2020. We can assume
the Book Value for such amount shares would be £1 x 5,197,000 =
£5,197,000. Therefore, the 2022 BV of common shares = 2021 BV + BV
of the buyout.
We can assume that the BV of common shares won't be changed in
2022-26 as the number of common shares will be constant.
(2) Additional paid-in capital. It refers to
the differences between the Market Value and Book Value of Common
Shares. Similar to BV of Common Equities,
For 2021 Additional paid-in capital of Common Shares, we can
assume that it is as the same as 2020 figure.
According to the case, the Market Value for the buyout shares is
£249,456,000, while the Book Value for the buyout shares would be
£5,197,000. So the Additional paid-in capital for the buyout plan
would be MV - BV (£249,456,000 - £5,197,000 = 244,259,000).
Therefore, the 2022 Additional paid-in capital = 2021 Figure +
Additional paid-in capital for the buyout plan
To simplify the calculation, we can assume that the Additional
paid-in capital of common shares won't be changed in 2022-26 as
there won't be new shares issued.
(3) Retained Earnings. The projected figures
for 2021 and 2022-26 are provided as below.
(4) External Financing Required. It refers to
the amount of external financing need to force the firm’s pro forma
BS to balance. Because of the nature of the judgmental approach,
the pro forma BS is not expected to balance without some type of
adjustment. For example, The External Financing Required in 2021
can be calculated as (pro forma Total Asset in 2021 – pro forma
Total Liabilities and Stockholders' Equity in 2021). Similarly, you
can estimate the values over 2022-2026. Pls note - The External
Financing Required can be either positive or negative.
Balance Sheets at December 31 in IFOonal 2026 2025 2024 2023 2022 2021 2020 2019 ASSETS Current Assets E 15,184 £ 48,723 £ 82,336 £ 116,436 € 164,368 £ 255,487 £ 4,061 E 2,382 Cash Marketable securities (note A) Accounts receivable E 2,010 £ 5,272 E 8,004 £ 54,789 12,936 £ 67,915 £ 5,061 € 16,241 £ 27,445 £ 38,812 £ 27,942 £ 23,285 £ 19,404 £ 16,170 € 146,697 £ 122,248 £ 101,873 £ 84,894 € 1,597 £ 1,331 £ 1,109 € 924 E 196,481 £ 211,828 £ 232,167 € 257,236 £ 10,349 £ 8,960 € 8,350 54,332 £ 47,041 £ 36,769 Inventories E Prepaid expenses 739 £ 591 E 512 E 759 Total current assets £ 300,747 € 322,769 £ 65,846 £ 56,264 Fixed Assets (Notes A, C and E) Land E 811 £ 811 € £ 40,518 £ 33,630 46,611 £ 38,842 £ 87,940 £ 73,283 £ Buildings and leasehold improvements Equipment E Total Land, Building and Equipment E Less accumulated depreciation and amo £ Net property, plant and equipment E Other Assets (Note A) E 811 £ E 811 £ £ 58,702 £ 48,784 67,119 £ 55,933 £ 126,633 £ 105,527 £ 53,165 € 51,191 £ 73,468 £ 54,336 £ 1,163 £ 969 £ 271,112 £ 267,134 € 811 £ 811 £ 811 £ 811 £ 26,742 £ 21,231 £ 18,273 £ 11,928 31,074 € 24,859 £ 21,523 £ 13,768 58,626 £ 46,901 £ 40,607 £ 26,507 45,816 £ 16,146 £ 11,528 £ 7,530 12,810 £ € 30,755 £ 29,079 € 18,977 539 £ 431 £ 373 € 668 314,096 £ 353,955 £ 95,298 € 75,909 49,311 £ 47,521 £ 38,629 £ 25,762 € 808 E 673 £ 283,671 £ Total Assets £ 271,603 £ LIABILITIES Current Liabilities Accounts payable £ 44,576 £ 37,147 £ 30,955 € 25,796 £ 20,637 € 16,510 € 14,294 € 7,591 Notes payable-banks (note B) £ £ E 432 £ 2,159 £ 3,887 £ 5,614 € 6,012 Current maturieties of long-term debt (Note C) £ E 1,884 £ 1,884 £ 2,678 £ 2,678 2,678 € 1,884 £ 1,516 Accrued liabilities £ 17,679 € 14,732 € 12,277 £ 10,231 € 8,185 € 6,548 £ 5,669 £ 5,313 Total current liabilities E 62,255 £ 53,763 £ 45,116 £ 39,137 E 33,659 £ 29,622 £ 27,461 £ 20,432 Long-term liabilities Deferred taxes (Notes A and D) £ 843 € 843 £ 843 E 843 £ 843 £ 843 £ 843 £ 635 Long-term Debt (Note C) E 506,842 £ 526,447 £ 547,936 £ 568,631 £ 594,909 £ 617,587 £ 21,059 € 16,975 Total long-term liabilities E 507,685 £ 527,290 £ 548,779 £ 569,474 € 595,752 € 618,430 £ 21,902 € 17,610 Total liabilities £ 569,940 £ 49,363 £ 593,895 £ 608,611 € 629,411 £ 648,052 £ 49,363 £ 38,042 STOCKHOLDERS' EQUITY Common stock, par value £1, authorised 10,000,000 shares; £ 4,803 E 4,594 Additional paid-in capital - £ 957 £ 910 £65, 177 £49.418 Retained Earnings £35,616 £23,798 £16,150 £49,387 Total stockholders' equity £ 40,175 £ 32,363 £ 45,935 € 37,867 £ 95,298 £ 75,909 Total Liabilities and Stockholders' Equity
Income Statement at December 31 in (£000s) 2026 2025 2024 2023 2022 2021 2020 2019 672,349 403,421.63 268,927 £ 135,596 £ 44,463.57 12,468 £ 9,402.28 66,997 £ 560,291 £ 336,184.70 224,106 £ 114,138 £ 37,052.98 10,390 £ 7,835.23 54,690 £ 466,909 280,153.91 € 186,755 £ 96,076 £ 30,877.48 £ 8,658 £ 6,529.36 € 44,614 £ 389,091 £ 233,462 £ 155,629 £ 80,872 £ 25,731 £ 7,215 E 5,441 £ 36,370 £ 311,273 £ 186,769 £ 124,503 £ 65,351 20,585 £ 5,772 £ 4,353 £ 28,442 £ 249,018 £ 149,415 £ 99,603 £ 52,809 16,468 £ 4,618 € 3,482 £ 22,226 £ 215,600 £ 129,364 £ 86,236 £ 45,722 £ 14,258 £ 3,998 £ 3,015 £ 19,243 £ 153,000 91,879 61,121 33,493 10,792 2,984 2,046 11,806 Net Sales £ Cost of goods sold (note A) Gross Profit £ Selling and Administrative expenses (Notes A & E) E Advertising Depreciation and Amortisation (Note A) £ Repairs and maintenance Operating profit £ Other Income (expense) Interest income £ Interest expense Earnings before taxes Taxes (Notes A and D) E Net earnings Basic earnings per common share (Note G) Diluted earnings per common share (Note G) 1,316 £ 971.00 64,710.33 29,120 £ 35,590.68 1,097 £ 1,155.00 52,438.06 23,597 £ 28,840.93 914 € 1,338.00 € 42,362.12 £ 19,063 £ 23,299.17 £ 762 £ 1,942 £ 33,666 £ 15,150 £ 18,516 £ 609 £ 2,257 € 25,576 £ 11,509 £ 14,067 £ 487 € 2,986 -£ 24,724 £ 11,126 £ 13,598 £ £ f 422 £ 2,585 E 17,080 € 7,686 £ 9,394 £ 1.96 E 1.95 £ 838 2,277 10,367 4,457 5,910 1.29 1.29
At formation the company was authorised to issue a total of 10 million shares of common stock with par value of £1.00. Out of these, only 4,803,000 shares were issued and sold to the public, with no shareholder owning more than 5% of the shares. Diamond equity would purchase Sports World's remaining 5,197,000 shares (upon issue) for which they would pay a total of £249,456,000 under the agreement. Diamond Equity would gain control of Sports World and own 51.97% of the company. Since this will have an impact on the ownership of the original shareholders, in order to keep them happy Diamond Equity has guaranteed the dividend payment for the next five years after the deal is signed as follows: 8% for year 1, 9% for year 2, 11% for year 3, 13% for year 4, and 15% for year 5. After this the dividend to be paid will be voted by the Board of Directors. As owner of a controlling stake in Sports World, Diamond Equity will have a major influence on management and is embarking on an international expansion plan for the business that will increase total sales by 25% per annum in the next two years and for which they will require £600 million as follows: • With the injection of capital from the purchase of shares will be used to buy an additional 400 stores globally at a cost of approximately £500 million. These will be bought from the administrators of KKB Sports and Global Shoes, two major retailers that have recently filed for bankruptcy, creating a major opportunity for Sports World to take over the market. o Diamond Equity will issue of 500,000 bonds (face value £1,000) with a 7% coupon paid semi-annually and maturity 10 years to buy the new stores. • In addition to this Diamond Equity will need £10 million in funds to equip and stock the new shops.
Shareholders' Equity (1) Common stock, par
value £1. It refers to the Book Value of Common Equity.
For 2021 BV of Common Shares, we can assume that it is as the
same as 2020 value.
According to the buyout plan, Diamond equity would purchase
Sports World’s remaining 5,197,000 shares in 2020. We can assume
the Book Value for such amount shares would be £1 x 5,197,000 =
£5,197,000. Therefore, the 2022 BV of common shares = 2021 BV + BV
of the buyout.
We can assume that the BV of common shares won't be changed in
2022-26 as the number of common shares will be constant.
(2) Additional paid-in capital. It refers to
the differences between the Market Value and Book Value of Common
Shares. Similar to BV of Common Equities,
For 2021 Additional paid-in capital of Common Shares, we can
assume that it is as the same as 2020 figure.
According to the case, the Market Value for the buyout shares is
£249,456,000, while the Book Value for the buyout shares would be
£5,197,000. So the Additional paid-in capital for the buyout plan
would be MV - BV (£249,456,000 - £5,197,000 = 244,259,000).
Therefore, the 2022 Additional paid-in capital = 2021 Figure +
Additional paid-in capital for the buyout plan
To simplify the calculation, we can assume that the Additional
paid-in capital of common shares won't be changed in 2022-26 as
there won't be new shares issued.
(3) Retained Earnings. The projected figures
for 2021 and 2022-26 are provided as below.
(4) External Financing Required. It refers to
the amount of external financing need to force the firm’s pro forma
BS to balance. Because of the nature of the judgmental approach,
the pro forma BS is not expected to balance without some type of
adjustment. For example, The External Financing Required in 2021
can be calculated as (pro forma Total Asset in 2021 – pro forma
Total Liabilities and Stockholders' Equity in 2021). Similarly, you
can estimate the values over 2022-2026. Pls note - The External
Financing Required can be either positive or negative.
- Please Help To Resolve These Items Shareholders Equity 1 Common Stock Par Value 1 It Refers To The Book Value Of 1 (172.13 KiB) Viewed 32 times
Income Statement at December 31 in (£000s) 2026 2025 2024 2023 2022 2021 2020 2019 672,349 403,421.63 268,927 £ 135,596 £ 44,463.57 12,468 £ 9,402.28 66,997 £ 560,291 £ 336,184.70 224,106 £ 114,138 £ 37,052.98 10,390 £ 7,835.23 54,690 £ 466,909 280,153.91 € 186,755 £ 96,076 £ 30,877.48 £ 8,658 £ 6,529.36 € 44,614 £ 389,091 £ 233,462 £ 155,629 £ 80,872 £ 25,731 £ 7,215 E 5,441 £ 36,370 £ 311,273 £ 186,769 £ 124,503 £ 65,351 20,585 £ 5,772 £ 4,353 £ 28,442 £ 249,018 £ 149,415 £ 99,603 £ 52,809 16,468 £ 4,618 € 3,482 £ 22,226 £ 215,600 £ 129,364 £ 86,236 £ 45,722 £ 14,258 £ 3,998 £ 3,015 £ 19,243 £ 153,000 91,879 61,121 33,493 10,792 2,984 2,046 11,806 Net Sales £ Cost of goods sold (note A) Gross Profit £ Selling and Administrative expenses (Notes A & E) E Advertising Depreciation and Amortisation (Note A) £ Repairs and maintenance Operating profit £ Other Income (expense) Interest income £ Interest expense Earnings before taxes Taxes (Notes A and D) E Net earnings Basic earnings per common share (Note G) Diluted earnings per common share (Note G) 1,316 £ 971.00 64,710.33 29,120 £ 35,590.68 1,097 £ 1,155.00 52,438.06 23,597 £ 28,840.93 914 € 1,338.00 € 42,362.12 £ 19,063 £ 23,299.17 £ 762 £ 1,942 £ 33,666 £ 15,150 £ 18,516 £ 609 £ 2,257 € 25,576 £ 11,509 £ 14,067 £ 487 € 2,986 -£ 24,724 £ 11,126 £ 13,598 £ £ f 422 £ 2,585 E 17,080 € 7,686 £ 9,394 £ 1.96 E 1.95 £ 838 2,277 10,367 4,457 5,910 1.29 1.29
At formation the company was authorised to issue a total of 10 million shares of common stock with par value of £1.00. Out of these, only 4,803,000 shares were issued and sold to the public, with no shareholder owning more than 5% of the shares. Diamond equity would purchase Sports World's remaining 5,197,000 shares (upon issue) for which they would pay a total of £249,456,000 under the agreement. Diamond Equity would gain control of Sports World and own 51.97% of the company. Since this will have an impact on the ownership of the original shareholders, in order to keep them happy Diamond Equity has guaranteed the dividend payment for the next five years after the deal is signed as follows: 8% for year 1, 9% for year 2, 11% for year 3, 13% for year 4, and 15% for year 5. After this the dividend to be paid will be voted by the Board of Directors. As owner of a controlling stake in Sports World, Diamond Equity will have a major influence on management and is embarking on an international expansion plan for the business that will increase total sales by 25% per annum in the next two years and for which they will require £600 million as follows: • With the injection of capital from the purchase of shares will be used to buy an additional 400 stores globally at a cost of approximately £500 million. These will be bought from the administrators of KKB Sports and Global Shoes, two major retailers that have recently filed for bankruptcy, creating a major opportunity for Sports World to take over the market. o Diamond Equity will issue of 500,000 bonds (face value £1,000) with a 7% coupon paid semi-annually and maturity 10 years to buy the new stores. • In addition to this Diamond Equity will need £10 million in funds to equip and stock the new shops.