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Lift truck attachments Inc




FINANCIAL FORECAST;The attached financial statements (income statements, balance sheets and statements of cash flow) can be used to assist in forecasting results for the next 1-1/2 half years. In addition, the RMA ratios can also be used to determine forecasted financials. The assumptions to be used in the forecast are as follows;Net sales are forecasted to total $2.7 million, a drop from 1990 to 1991. Net sales are expected to improve in 1992 to a level of $3 million;Gross profits are expected to drop to 36% of sales for the entire year 1991 and to drop further to 35% of net sales in 1992.;Sales expenses are projected to increase in the second half of 1991 with the total year 1991 amounting to $169,000. Sales expenses for 1992 are projected to increase by 5% over those in 1991.;Administrative expenses are expected to increase to a projected $452,400 for all of 1991 and to $481,200 in 1992.;Depreciation will amount to $36,300 for all of 1991 and $20,000 for 1992.;Other expense will increase to $27,800 for all of 1991 and will amount to $20,800 in 1992. (This results from;substantial increases in interest costs resulting from acquisition debt.);Income taxes include both state and federal taxes and will amount to 32.69% of pretax profits in 1991 and;39.22% of pretax profits in 1992. (This is a higher rate than that historically experienced because of the;previous use of tax credits that reduced income tax to a lower than normal rate.);There will be no profit sharing bonuses in 1991 and 1992.;Accounts receivable will amount to 43 days of sales at the end of 1991 and will hold at the same dollar figure;at the end of 1992. (Hint: Don?t enter cash into the balance sheet initially. Use cash as the ?plug? figure.);Inventory at the end of 1991 will amount to 59.07days of 1991 Cost of Sales and will hold the same dollar;figure at the end of 1992.;Prepaid expenses will amount to the same dollar figure at the end of 1991 and 1992 as it was on April 30;1991.;There will be no additions to fixed assets in the last fiscal half of 1991 and additions to fixed assets will;amount to $20,000 during 1992.;The current portion of long term debt will amount to $49,700 at the end of 1991 and $42,300 at the end of;1992.;Accounts payable will amount to 35.43 days of 1991 cost of sales at the end of 1991 and will amount to 35.04;days of 1992 projected cost of sales.;Accrued expenses will amount to $38,400 at the end of 1991 and $40,000 at the end of 1992.;Long term debt net of the current portion will amount to $182,700 at the end of 1991 and to $140,400 at the;end of 1992.;Common stock will remain at $9,800 at the end of 1991 and 1992.;Retained earnings will increase or decrease by the amount of after tax profit or loss during the period covered;by the statements.;There will be no distributions from retained earnings to shareholders during the forecast period.;ASSIGNMENT;Please complete the forecasted financial statements by filling in the blanks on the attached statements.


Paper#77259 | Written in 18-Jul-2015

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