Suppose A Firm Calculates Its Efn

1. We have the following information for Athabasca Inbv vbn4rrrrrr5555555 vc c. (10 marks) Athabasca, Inc. 2010 Income Statement ( in millions) Net Sales 1,384 Less Cost of Goods Sold 605 Less Depreciation 180 Earnings before interest and taxes 599 Less Interest paid 80 Taxable Income 519 Less Taxes 156 Net Income 363 Addition to retained earnings 254 Cash dividends paid 109 Athabasca, Inc. 12/31/09 and 12/31/10 Balance Sheet ( in millions) 2009201020092010Cash 100 121Accounts payable 400 350A/R350425Notes payable390370Inventory440410 Total CL 790 720 Total CA 890 956Long-term debt500550Net fixed assets1,5561,704Owners equity Common stock600580 Retained Earnings556810Total assets2,4462,660Total liabilities2,4462,660 The firm has 180 million common shares outstanding. Calculate the following Earnings retention ratio for 2010. The dividend to be paid (in dollars) in 2011. Assume Athabasca is projecting a 20 increase in sales for the coming year, and that cost of goods sold and general/administrative expenses remain a constant percentage of sales. Also assume that depreciation, interest paid, and the firms tax rate remain unchanged and that the firms dividend payout is 40. Capital intensity ratio based on the 2010 results. Full capacity sales if Athabasca is currently operating at 70 capacity. External financing needed (EFN) for 2011 if Athabasca is projecting