FINANCIAL STATEMENT OVERVIEW ASSIGNMENT # 3 Members: Zhishuang Liu Siyi Shang Qihui Wu Anqi Li Context 1 Assumptions (1) Interest Income grows at a certain rate every year. (2) There is no issue of new shares (3) There are tendencies of the ratios‚ such as net interest income margin‚ net income margin‚ return on asset‚ return on equity‚ etc.‚ that could be used for forecasting. (4) Simplify the accounts of Balance Sheet‚ Income Statement and Cash Flow Statement
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Operating Statement To create the pro forma operating statement we used ratios of COGS/Sales and Operating Expense/Sales for years 2004‚ 2005‚ and 2006. We then took the average of these ratios and multiplied them by sales for 2007 to come up with 2007 COGS and Operating Expenses. To calculate interest expense we included the outstanding loan Jones has with Verden and the new line of credit he would be taking out with Southern Bank and Trust. We calculated Verden’s interest expense by multiplying
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Exhibit 1 Pro Forma Balance Sheets Under Seasonal Production‚ 1994 (thousands of dollars) Actual Dec. 31‚ 1993 Casha Accounts receivableb Inventoryc Current assets Net plant and equipmentd Total assets Accounts payablee Notes payable‚ bankf Accrued taxesg Long-term debt‚ current portion Current liabilities Long-term debth Seasonal Liabilities Shareholders’ equity Total liabilities and equity Jan. Feb. Mar. Apr. May July Aug. Sept. Oct. $200 2‚905 586 $878 1‚060 586 $1‚526 260 586 $1
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(1) There were many compounding factors that caused SureCut Shears to be unable to pay its bank loan by March 31‚ 1996. When looking at the pro forma income statement as compared to the actual income statement we see the following inconsistencies‚ which are contributing to SureCut’s financial problems: Anticipated Actual Dollar Loss Contributed Sales 25‚800 22‚987 2‚813 COGS (% to Sls) 70.5% 73.8% 768 Gross Profit (% to Sls) 29.5% 26.2% SG&A Expenses (% to Sls) 9.4% 10.6% 269 Total
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Selected Companies Pro Forma Apple has become very successful in the technology industry. The company has increased its net sales from 2006 to 2007‚ which proves they are making good capital budgeting decisions. A pro forma income statement and balance sheet showing the future planning and growth of a company. The pro forma income statement and balance sheet will explain a cash budget‚ underlying assumptions of calculations‚ calculations of different ratio analysis‚ and make recommendations to management
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A. Documents A. Analysis B1. To make my pro-forma statements I had to plan for future goals‚ I intended to make up the money I used in the first three quarters by quarter 4. I tried to backwards plan by adjusting the numbers to hopefully meet the criteria. Each quarter my cash flow increased by about 300‚000. I did not increase my effectiveness with pro-forma statements or budgets to ensure adequacy of funds. The production capacity in my first 2 quarters was low but only because it
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increase in sales‚ the pro forma income statement will look like this: MOOSE TOURS INC. Pro Forma Income Statement Sales $ 1‚114‚800 Costs 867‚600 Other expenses 22‚800 EBIT $ 224‚400 Interest 14‚000 Taxable income $ 210‚400 Taxes(35%) 73‚640 Net income $ 136‚760 The payout ratio is constant‚ so the dividends paid this year is the payout ratio from last year times net income‚ or:
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Blackboard. No late assignment will be accepted. Enjoy the problems! Assignment Instructions: For this homework you will have to predict the future financial statements of the Body Shop. There is a template provided. Use the figures for 2011 and the forecasting assumptions on the template to forecast the income statement and balance sheet for the next three years. For some variables there are no assumptions provided since they should be calculated rather than predicted (e.g. retained earnings)
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Income statement The income statement or the profit and loss account as it is also called measures reports how much profit (wealth) has the business generated over a period of time. To measure profit the total generated revenue over a period must be identified. Revenue is a measure of inflow of economic benefits arising from the operations of the business. These benefits will either result in an increase of assets such as cash or amounts owed to the business by the customers or a decrease
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The Income Statement This indicates financial performance over a period of time. It is usually done at the end of a financial year (30th June)‚ but an income statement can be made up at other times‚ e.g.‚ if a business wishes to apply for a loan‚ the bank may ask for a more recent income statement. The other names for this kind of statement are Revenue Statement and Profit and Loss Statement. Income Statement for Ima Mess‚ year ended 30.6.12 |
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