| INPUT DATA |
| Forecasted annual sales growth |
10% |
|
You find that the Cash account balance drops below zero in some years in the first question. |
| COGS/SALES |
55% |
|
In this question, build the the pro forma assuming that if the cash balance should be at least 2000. If needed, borrow short-term debt to make up the shortfall. |
| SG&A/SALES |
20% |
| DEPRECIATION/Gross PPE |
8% |
| INTEREST RATE |
10% |
| TAX RATE |
35% |
| CASH/SALES |
Plug |
| ACCOUNT RECEIVABLE/SALES |
35% |
| INVENTORY/SALES |
85% |
| ACCOUNTS PAYABLE/SALES |
14% |
| OTHER CURRENT LIAB/SALES |
25% |
| GROSS PPE |
70% of sales if Sales <=45000 |
|
27000+0.7(Sales-40000) if 45000< Sales <= 50000 |
|
38500+0.3(Sales-50000) if Sales > 50000 |
| No change in dividend |
| No change in long-term debt and stock |
| SHORT-TERM BORROWING |
Plug |
|
2001 |
2002 |
2003 |
2004 |
2005 |
2006 |
| INCOME STATEMENT |
| Sales |
39,792 |
43,771 |
48,148 |
52,963 |
58,259 |
64,085 |
| Cost of goods sold |
(22,335) |
(24,074) |
(26,482) |
(29,130) |
(32,043) |
(35,247) |
| Selling, general, & admin. expenses |
(7,970) |
(8,754) |
(9,630) |
(10,593) |
(11,652) |
(12,817) |
| Depreciation |
(2,667) |
(2,292) |
(2,534) |
(2,884) |
(3,215) |
(3,348) |
| Operating income |
6,820 |
8,651 |
9,503 |
10,357 |
11,350 |
12,673 |
| Interest expense |
(3,200) |
(3,726) |
(3,919) |
(4,227) |
(4,488) |
(4,488) |
| Earnings before taxes |
3,620 |
4,925 |
5,585 |
6,130 |
6,863 |
8,186 |
| Income taxes |
(1,267) |
(1,724) |
(1,955) |
(2,146) |
(2,402) |
(2,865) |
| Net Earnings |
2,353 |
3,201 |
3,630 |
3,985 |
4,461 |
5,321 |
| Dividends |
1,500 |
1,500 |
1,500 |
1,500 |
1,500 |
1,500 |
| Retentions of Earnings |
853 |
1,701 |
2,130 |
2,485 |
2,961 |
3,821 |
| BALANCE SHEET |
| Assets |
| Cash |
1,540 |
2,000 |
2,000 |
2,000 |
2,296 |
2,998 |
| Accounts Receivable |
13,316 |
15,320 |
16,852 |
18,537 |
20,391 |
22,430 |
| Inventories |
34,717 |
37,206 |
40,926 |
45,019 |
49,521 |
54,473 |
| Total Current Assets |
49,573 |
54,525 |
59,778 |
65,556 |
72,208 |
79,901 |
| Gross Property Plant & Equipt. |
26,667 |
30,640 |
32,704 |
39,389 |
40,978 |
42,726 |
| Accumulated Depreciation |
(10,205) |
(12,497) |
(15,031) |
(17,915) |
(21,130) |
(24,478) |
| Net Property Plant & Equipt. |
16,462 |
18,142 |
17,673 |
21,474 |
19,848 |
18,248 |
| Total Assets |
66,035 |
72,668 |
77,451 |
87,030 |
92,056 |
98,149 |
| Liabilities and Stockholders’ Equity |
| Short Term Borrowings |
25,802 |
28,714 |
29,660 |
34,877 |
34,877 |
34,877 |
| Accounts Payable |
5,328 |
6,128 |
6,741 |
7,415 |
8,156 |
8,972 |
| Other Current Liabilities |
9,723 |
10,943 |
12,037 |
13,241 |
14,565 |
16,021 |
| Total Current Liabilities |
40,853 |
45,785 |
48,438 |
55,532 |
57,598 |
59,870 |
| Long Term Debt |
10,000 |
10,000 |
10,000 |
10,000 |
10,000 |
10,000 |
| Total Liabilities |
50,853 |
55,785 |
58,438 |
65,532 |
67,598 |
69,870 |
| Stock |
10,000 |
10,000 |
10,000 |
10,000 |
10,000 |
10,000 |
| Retained earnings |
5,182 |
6,883 |
9,013 |
11,498 |
14,458 |
18,279 |
| Stockholders’ Equity |
15,182 |
16,883 |
19,013 |
21,498 |
24,458 |
28,279 |
| Total Liabs. & Stkhldrs’ Eq. |
66,035 |
72,668 |
77,451 |
87,030 |
92,056 |
98,149 |
