Problem - Use the following information for the forecasting related questions
|
Year (Most recent in far right column.)
|
2009
|
2010
|
|
BALANCE SHEET DATA
|
|
|
|
Cash
|
4,200
|
4,500
|
|
Marketable Securities
|
9,000
|
10,000
|
|
Accounts Receivable
|
5,000
|
5,500
|
|
Inventories
|
1,900
|
2,100
|
|
CURRENT ASSETS
|
20,100
|
22,100
|
|
Long Term Investments
|
10,000
|
14,000
|
|
Property, Plant & Equipment - at cost
|
46,000
|
52,000
|
|
Accumulated Depreciation
|
-1,600
|
-4,820
|
|
TOTAL ASSETS
|
74,500
|
83,280
|
|
Accounts Payable
|
4,100
|
3,750
|
|
Short Term Debt
|
6,784
|
5,000
|
|
CURRENT LIABILITIES
|
10,884
|
8,750
|
|
Long Term Debt
|
24,200
|
21,000
|
|
TOTAL LIABILITIES
|
35,084
|
29,750
|
|
Common Stock + Paid in Capital
|
20,000
|
27,000
|
|
Retained Earnings
|
19,416
|
26,530
|
|
SHAREHOLDERS' EQUITY
|
39,416
|
53,530
|
|
TOTAL LIABILITIES AND EQUITIES
|
74,500
|
83,280
|
|
INCOME STATEMENT DATA
|
|
|
|
Revenues
|
91,000
|
110,000
|
|
Cost of Goods Sold
|
-40,950
|
-60,500
|
|
Gross Profit
|
50,050
|
49,500
|
|
Selling, General and Admin. Expense
|
-13,650
|
-22,000
|
|
Depreciation Expense
|
-3,100
|
-3,220
|
|
Operating Profit
|
28,966
|
24,280
|
|
Interest Income
|
390
|
760
|
|
Interest Expense
|
-3,200
|
-3,068
|
|
Income before Tax
|
26,156
|
21,972
|
|
Income Tax Expense
|
-6,539
|
-8,789
|
|
NET INCOME (computed)
|
19,617
|
13,183
|
Additional information
There was no Marketable securities, PP&E, or investments sold.
Assume the common stock and paid in capital will stay same for the coming year
Use average numbers for the denominator for the calculation of turnover ratios
The forecasting techiques to be used are as follows:
- Sales is based on the past growth rate
- Turnover ratio-Cash, A/R, Inventories, A/P (Use purchase forecasted)
- Change/Sales-Marketable Securities, PP&E, Investment, Short-term and Long-term Debts
- Proportion to Sales-COGS, Gross Profit, SGA
- Depreciation expense is based on the Depreciation/beginning PP&E
- Interest Income or Interest Expense can be forecasted based on the interest rates form the beginning intrest bearing assets and liabilities
Q1. Calculate the Sale growth rate to be used forecast
Q2. What would be the turnover ratios to be used for the forecasts of A/R, Cash, Inventories, and A/P?
A/R:
Cash:
Inventories
A/P
Q3. Forecast Sales and COGS for the year 2011.
Sales:
COGS