Explore BrainMass
Share

Explore BrainMass

    Financial Forecasting Problems

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    Please help with the following problem.

    Gainesville Surgicenter Inc. is a large, ambulatory surgery center owned by a group practice of surgeons in Gainesville, Florida. The 2006 financial statements for the firm are shown below:

    (***see attached excel file***)

    a. Assume that the company was operating at full capacity in 2006 with regard to all items except fixed assets (operating rooms and support space); fixed assets in 2006 were utilized to only 75 percent of capacity. By what percentage could 2007 revenues increase over 2006 revenues without the need for an increase in fixed assets?

    b. Now suppose 2007 revenues increase by 25 percent over 2006 revenues. Use the constant growth method to develop a pro forma balance sheet and income statement as in Table 14.3. Assume that Gainesville cannot sell any fixed assets and that any financing required is borrowed as notes payable at an interest rate of 12 percent.

    © BrainMass Inc. brainmass.com October 10, 2019, 2:44 am ad1c9bdddf
    https://brainmass.com/economics/finance/financial-forecasting-problems-391320

    Attachments

    Solution Summary

    This solution helps answer financial forecasting problems. The solution is given in an Excel file.

    $2.19