The FINC 5000 Associates Corporation (FAC) has begun selling a new product and they want you to help them with next
Question # 00005509
Posted By:
Updated on: 12/16/2013 02:50 PM Due on: 12/31/2013
1. The FINC 5000 Associates Corporation (FAC) has begun selling a new product and they want you to help them with next year’s pro forma financial statements. Using the worksheet below, complete the company’s forecast.
Assumptions:
To begin with, FAC is sure sales will grow 20% next year. Assume that is true. Then assume that COGS, Current Assets, and Current Liabilities all vary directly with Sales (that means if sales grows a certain percentage, then the account in question will grow by that same percentage). Assume that fixed expenses will remain unchanged and that $2,000 worth of new Fixed Assets will be obtained next year. Lastly, the current dividend policy will be continued next year.
FINC 5000 Associates Corporation
Financial Forecast
Estimated
This year for next year
Sales $10,000 ________
COGS 4,000 ________
Gross Profit 6,000 ________
Fixed Expenses 3,000 ________
Before Tax Profit 3,000 ________
Tax @ 33.3333% 1,000 ________
Net Profit $2,000 ________
Dividends $0 ________
Current Assets $25,000 ________
Net Fixed Assets 15,000 ________
Total Assets $40,000 ________
Current Liabilities $17,000 ________
Long term debt 3,000 ________
Common Stock 7,000 ________
Retained Earnings 13,000 ________
Total Liabs & Eq $40,000 ________
(AFN) = ________
Assumptions:
To begin with, FAC is sure sales will grow 20% next year. Assume that is true. Then assume that COGS, Current Assets, and Current Liabilities all vary directly with Sales (that means if sales grows a certain percentage, then the account in question will grow by that same percentage). Assume that fixed expenses will remain unchanged and that $2,000 worth of new Fixed Assets will be obtained next year. Lastly, the current dividend policy will be continued next year.
FINC 5000 Associates Corporation
Financial Forecast
Estimated
This year for next year
Sales $10,000 ________
COGS 4,000 ________
Gross Profit 6,000 ________
Fixed Expenses 3,000 ________
Before Tax Profit 3,000 ________
Tax @ 33.3333% 1,000 ________
Net Profit $2,000 ________
Dividends $0 ________
Current Assets $25,000 ________
Net Fixed Assets 15,000 ________
Total Assets $40,000 ________
Current Liabilities $17,000 ________
Long term debt 3,000 ________
Common Stock 7,000 ________
Retained Earnings 13,000 ________
Total Liabs & Eq $40,000 ________
(AFN) = ________
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Rating:
/5
Solution: The FINC 5000 Associates Corporation (FAC) has begun selling a new product and they want you to help them with next