Professional Documents
Culture Documents
& 1997
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project the need for financing for the warehouse project
determined by the projected cash flows;
assess the financial health of Tire City before and after
the project is completed
General methodology for producing a forecast average
% of sales approach
Sales grow at 20% compounded
Cost of sales, S G & A average for past three years
96, use same for 97
Depreciation 96-213, 97-213+( 5% of 2400)
Liquidity
Current ratio
Quick ratio
Leverage
Debt to assets
Debt to equity
Times interest earned
Activity
Sales/assets
Days receivable
Days inventory
Days payable
Historical relationships
Management forecasts
Industry data
Common sense
1.
2.
a.
b.
c.
d.
e.
f.
g.
h.
i.
j.
k.
l.
m.
n.
o.
p.
q.
Cash
Accounts Receivable
Inventories
Total current assets
Land, buildings, equip., trucks
Accumulated depreciation
Net fixed assets
Other assets
Total assets
Accounts Payable
Note payable- bank
Accrued expenses & taxes
Total current liabilities
Mortgage payable
Capital stock
Earned surplus
Total liabilities & net worth
2.
Cash
Accounts Receivable
Inventories
Total current assets
Land, buildings, equip., trucks
Accumulated depreciation
Net fixed assets
Other assets
Total assets
Accounts Payable
Note payable- bank
Accrued expenses & taxes
Total current liabilities
Mortgage payable
Capital stock
Earned surplus
Total liabilities & net worth
3.
a.
b.
c.
d.
e.
f.
g.
h.
i.
j.
k.
l.
Sales
Less: Cost of Goods Sold
Direct Labor
Materials
Depreciation
Overhead
Total Cost of Goods Sold
Gross Margin
Sales & administrative expense
Earnings before taxes
Income tax
Net Profit
3b.
a.
b.
c.
d.
e.
f.
g.
h.
i.
j.
k.
l.
m.
n.
o.
p.
q.
Cash
Accounts receivable
Inventories
Total current assets
Machinery & equipment
Accumulated depreciation
Net fixed assets
Other assets
Total assets
Accounts payable
Accrued wages
Accrued taxes
Total current liabilities
Long Term Debt
Capital stock
Earned surplus
Total liabilities & net worth
3.
IDEAS, INC.
Pro Forma Operating Statement
For the Six Months Ended
(Thousands of dollars)
Sales
Less: Cost of Goods Sold
Direct Labor
Materials
Depreciation
Overhead
Total Cost of Goods Sold
Gross Margin
Sales & administrative expense
Earnings before taxes
Income tax
Net Profit
600 (100*6)
120
160
12
168
460
(20*6)
(40*6-80)
(2 per month*6)
(25/month*6+3/month)
140
108 (18*6)
32
16 (50% of profit)
16
3.
Cash
Accounts receivable
Inventories
Total current assets
Machinery & equipment
Accumulated depreciation
Net fixed assets
Other assets
Total assets
Accounts payable
Accrued wages
Accrued taxes
Total current liabilities
Long Term Debt
Capital stock
Earned surplus
Total liabilities & net worth
IDEAS, INC.
Pro Forma Balance Sheet
At the end of six months
(Thousands of dollars)
15 (given)
133 (600/180*40)
80 (20+60)
228
60 (given)
12 (2 per month*6)
48
5 (given)
281
40 ( 240/180*30)
5 (120/6/4)
16 (above)
61
104
100 (55+45)
16 (above)
281