Problem 1

a. What are the 4 things that financial planning can accomplish?

b. What is “the plug” variable in financial planning?
c. PT ABC has a great number of investment opportunities but it has limited cash, while PT XYZ has less
investment opportunities but it has ample cash flow. Will you use the same or different “plug”
variable(s) for these companies? Explain.

Problem 2
Based on the following information, calculate the sustainable growth rate:

- Profit margin : 10.7%

- Capital intensity ratio : 0.8
- Debt-equity ratio : 0.45
- Net income : $ 59,530
- Dividends : $ 19,790

Problem 3

PT Alamanda
Income Statement
PT Alamanda
Balance Sheet
Sales 4,250
Costs -3,875 Liabilities & Owner's
Assets equity
Taxable Income 375
Current Assets 900 Current Liabilities 500
Taxes (34%) -127.5
Net Fixed
Assets 2200 Long term debt 1800
Net Income 247.5 Owner's equity 800
Dividends - 82.6
Total liabilities &
Addition to retained earnings 164.9 Total assets 3100 Owner's equity 3100

You are given the Financial Statement of PT Alamanda for year 2018. PT Alamanda projected the sales
will grow 10% in 2019. Assume the interest expense, tax rate, and dividend payout ratio are constant. The
expense, current asset, current liabilities growth following the sales. No new long term debt issue and no
new equity raised.

a. Based on information, how much external financing needed? Use percentage of sales approach
for the pro forma and assume PT Alamanda operates at full capacity and constant dividend payout
ratio.
b. How much the external financing needed if PT Alamanda only operated 60% of its fixed asset
capacity? How about 95 % of its fixed asset capacity?
c. Calculate the internal and sustainable growth rate using data of the year 2018.