Brandon Inc. began operations on Feb 1, 2023. Sales were evenly distributed across all months in 2023. An abbreviated income statement for Brandon Inc. is shown below.
In addition to these financial statements, you have also gathered the following information through conversations with employees, managers, and other individuals with knowledge about Brandon Inc.
Monthly sales are expected to grow by 200% in 2024.
Cost of Goods Sold during 2023 was 75% of sales.
The company plans to finalize closure of an old manufacturing facility at some point during 2024. The CFO estimates that this will result in a $3,331.25 loss for the company.
There is a 50% chance that tax rates will decrease to 0% in 2024 and a 50% chance that tax rates will remain the same.
Brandon will complete improvements to its manufacturing process on June 30, 2024. Upon completion, these improvements will reduce manufacturing costs by 25%. These improvements are valued on the books at $50,000 and expected to have a useful life of 10 years.
On January 1, 2024, Brandon plans to borrow $18,000 and also repay all its previously existing debt in full. This new debt will carry a 15% interest rate.
Brandon’s EPS in 2023 was $7.52.
Brandon will issue an additional 4,000 shares of stock during 2024.
Similar firms in Brandon’s industry have a P/E ratio of 25.
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