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Using the worksheet below, complete the company?s forecast.




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 25% 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) =;2. The Webster Wonders Corporation (WWC) has begun selling a new product and they want you to help them determine if they need additional funding (AFN) next year. Using the AFN formula method, calculate WWC?s AFN for next year (if any).;The company?s latest financial statements are shown below. Sales growth next year is forecast to be 25% and the net profit margin is expected to remain the same as it is this year. Cash, A/R, Inventory, A/P, and Accruals all vary directly with sales. The company is not operating at capacity and expects to be able to handle the increase in sales without adding fixed assets. Also, the company expects to pay out 60% of any profits as dividends.;Webster Wonders Corporation;Financial Statements;Historical;This year;Income statement;Sales $1,000;Costs $950;Profit $50;Balance Sheet;Cash $100;A/R $200;Inventory $200;Fixed assets $500;Total assets $1,000;A/P $50;Accruals $50;N/P $150;LTD $400;Common Stock $100;Ret earnings $250;Total Liabilities & Equity $1,000;End of assignment questions;(see answers to numerical problems below);Answers to numerical problems;Question 1: AFN = $1,000;Question 2: AFN = $75


Paper#24166 | Written in 18-Jul-2015

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