1b. Pro Forma Balance Sheet For the Pro Forma Balance Sheet 2020: Thibodaux is at full capacity so Net fixed Assets will have to increase at the same percentage as the sales increases (use % of sales). The NFA should be larger for 2020! Look at Income Statement above for the % increase. Due to the economy, ACP increases to 66 days and Inventory Turn-Over is reduced to 7.0. Use the % of sales for all liabilities that are spontaneous (will increase as sales increase that is AP and Accruals). Look at IS above for the % increase. Remember certain liabilities will also increase automatically (spontaneously) but some will not. Does NP & LTD increase because there was an increase in Sales? No. A firm has to make a loan or issue more bonds. The firm will do neither. The desired cash balance is $450,000. Use Income Statement from #3 for retained earnings. THIBODAUX BALANCE SHEET 5 decimals 2019 % of Sales PRO FORMA 2020 Cash 400,000 NA __________ A/R 1,112,109 NA _________ Inv 902,044 NA _________ Total Current Assets 2,414,153 Net Fixed Assets 10,000,000 _____ _________ Total Assets 12,414,153 2019 PRO FORMA 2020 Accounts Payable 500,000 _____ ___________ Notes Payable 1,000,000 ? ___________ Accruals 200,000 . ___________ Total Current Liabilities 1,700,000 ___________ Long-term Debt 4,714,153 ? ___________ Common Stock (par $1) 1,000,000 NA 1,000,000 Retained Earnings 5,000,000 ___________ Total Liabilities & Equity 12,414,153 Complete the Pro Forma BS for 2020 above to determine if financing is required. 2020 1. Total Assets $________________ 2. Total Liabilities & Equity $__________________ 3. FINANCING REQUIRED or EFN $___________________