6 Global Manufacturing, Inc. INCOME STATEMENT 7 2019 2020 89 0 1 $70,911,420 $48,113,332 $13,785,239 $85,218,840 57,181,806 16,873,362 9,012,849 11,163,672 12 13 TABLE #1 14 Total sales Cost of goods sold Administrative expense Earnings before interest, taxes, depreciation & amortization (EBITDA) Depreciation Earnings before interest & taxes.(EBIT) Interest expense Earnings Before Taxes (EBT) Taxes Net income Dividends Additions to Retained Earnings 15 16 1,700,510 7,312,339 1,390,284 5,922,055 1,243,632 4,678,423 1,169,606 3,508,818 2,027,160 9,136,512 1,603,312 7,533,200 1,581,972 5,951,228 1,487,807 4,463,421 17 18 19 20 21 24 Global Manufacturing, Inc. BALANCE SHEET 25 2019 2020 26 27 28 29 30 $2,836,450 8,509,350 20,351,550 31,697,350 22,975,245 $54,672,595 $1,851,754 $10,262,510 $23,144,820 35,259,084 $27,826,540 $63,085,624 31 32 33 34 TABLE #2 35 ASSETS Cash Accounts receivable Inventory Total Current Assets Net Fixed Assets TOTAL ASSETS LIABILITIES & STOCKHOLDER'S EQUITY Accounts payable Notes payable Total current liabilities Long-term debt TOTAL LIABILITIES Common stock Retained earnings* TOTAL STOCKHOLDERS' EQUITY TOTAL LIABILITIES & STOCKHOLDER'S EQUITY 36 37 38 $5,758,070 7,961,031 13,719,101 12,359,868 26,078,969 2,040,000 26,553,626 28,593,626 $7,151,072 10,094,260 17,245,332 12,783,245 30,028,577 2,040,000 31,017,047 33,057,047 39 40 41 42 $54,672,595 $63,085,624 43 44 45 Global Manufacturing, Inc. ADDITIONAL INFORMATION 46 Information 2019 2020 47 48 49 50 Depreciation as a % of net fixed assets Short-term interest expense Long-term interest expense Income tax rate Dividend payout ratio TABLE #3 7.68% 6.72% 6.92% 21.00% 25.00% 8.82% 7.12% 6.92% 21.00% 25.00% 51 52 Fixed assets as a percent of total capacity. 84.00% 91.00% 53 54 End of year stock price Number of common shares outstanding $67.13 1,750,000 $69.21 1,750,000 55 1 PRO FORMA 2021 (Financial Statements) Be sure to read the PRO-FORMA INSTRUCTIONS carefully before starting your calculations on this worksheet. 2 3 HELP: This problem is not in your textbook. See the CASE STUDY HELP files named and * TUTORIAL FOR PREPARING A PRO FORMA FORECAST - WITHOUT CORRECTIONS.pdf" and "TUTORIAL FOR PREPARING A PRO FORMA FORECAST - WITH CORRECTIONS.pdf" to guide you in doing each of the calculations. Also be sure to review the *08A-SAMPLE COMPANY PRO FORMA CORRECTIONS (calculation of key items).pdf" provided to help you setup your spreadsheet for these PRO FORMA calculations. 4 5 6 FINANCIAL DATA FOR 2020 Depreciation as a % of net fixed assets NOTE: Cells shaded in BLACK are the cells that require no calculations or input. 7 8.82% NOTE: Cells shaded in BLUE are the cel that are assumed to remain the same as they were in 2018. 8 Income tax rate 21.00% NOTE: Cells shaded in YELLOW are the cells you must provide the calculations. NOTE: Cells shaded in RED are the cells that will automatically fill-in. 25.00% Dividend payout ratio 9 Fixed assets as a percent of total capacity. 91.00% 10 11 PRO FORMA WITHOUT CORRECTIONS PRO FORMA WITH CORRECTIONS EFFECT OF MAKING CORRECTIONS 12 Actual Change = Pro Forma With Corrections - Pro Forma Without Corrections FORECAST FOR 2021 FORECAST FOR 2021 13 Actual Change % Change = Actual Change / Pro Forma Without Corrections % Change Global Manufacturing, Inc. 2020 Sustainable Growth Rate % = (Auto Transfer from GROWTH RATE worksheet 0.00% 0.00% 20.00195447% 14 INCOME STATEMENTS 15 16 Total sales estimate $85,218,840 $57,181,806 $16.873.362 $0 $0 17 $0 $0 0 $0 $0 $0 SEE INSTRUCTIONS IN TUTORALS 0.0% SEE INSTRUCTIONS IN TUTORALS 0.0% SEE INSTRUCTIONS IN TUTORALS 18 $0 $11, 163,672 $0 $0 $0 0.0% 19 Cost of goods sold Administrative expense Earnings before interest, taxes, depreciation & amortization (EBITDA) Depreciation Earnings before interest & taxes.(EBIT) Interest expense Earnings Before Taxes (EBT) 20 $0 TABLE #1 SEE INSTRUCTIONS IN TUTORALS 21 $0 $0 0.0% 2.027.160 $9,136,512 1.603.312 $7,533,200 Assume that the INTEREST EXPENSE stays the same as 2020 because you are assuming interest bearing debt will be the same as in 2020. 22 23 $0 0.0% $0 $0 1,603,312 $1,603,312 $0 $1,603,312 $0 $1,603,312 24 Taxes 0.0% 1,603,312 $1,603,312 -$336,696 $1,266,616 $316.654 $949,962 Assume that the TAX RATE stays the same as 2020. See the Tax rate shown above or on the FINANCIAL DATA worksheet. 25 1.581.972 $5,951,228 1.487.807 $4,463,421 Net income $0 $0 $0 26 Dividends Additions to Retained Earnings 0.0% 0.0% 0.0% $0 27 28 Assume that the Dividend Payout Ratio stays the same as 2020. See the Dividend Payout Ratio shown above or on the FINANCIAL DATA worksheet. 29 BALANCE SHEETS 30 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 0.0% SEE INSTRUCTIONS IN TUTORALS 0.0% SEE INSTRUCTIONS IN TUTORIALS 0.0% SEE INSTRUCTIONS IN TUTORALS 0.0% 0.0% SEE INSTRUCTIONS IN TUTORALS 0.0% $0 $0 ASSETS 31 32 Cash $1,851,754 33 Accounts receivable 10,262,510 34 Inventory 23.144.820 35 Total Current Assets 35,259,084 36 Net Fixed Assets 27_826 540 37 TOTAL ASSETS ######### LIABILITIES & STOCKHOLDER'S EQUITY 38 39 C Accounts payable 7,151,072 40 Notes payable 10.094,260 41 Total current liabilities 17,245,332 42 Long-term debt 12.783.245 43 TOTAL LIABILITIES 30,028,577 44 Common stock 2,040,000 45 Retained earnings 31.017.047 46 TOTAL STOCKHOLDERS' EQUITY 33.157.147 TOTAL LIABILITIES & $63,085,624 STOCKHOLDER'S EQUITY 47 TABLE #2 SEE INSTRUCTIONS IN TUTORALS Assume that Notes Payable and Long-Term Debt stay the same for 2020 so you can estimate the firm's External Funds Needed (EFN) more accurately. $0 $10,094,260 $10,094,260 $12,783,245 $22,877,505 $2,040,000 $0 $2.040.000 $0 $10,094,260 $10,094,260 $12,783,245 $22,877,505 $2,040,000 $0 $2.040.000 Common stock stays the same as 2020 because the major assumption of the Sustainable Growth Rate is that No New Common Stock is issued. $0 $0 0.0% SEE INSTRUCTIONS IN TUTORIALS 0.0% $24,917,505 $24,917,505 $0 0.0% External Funds Needed = $ol $0 $o 0.0% SEE INSTRUCTIONS IN TUTORIALS 48 49 50 IMPORTANT PERFORMANCE MEASURES 6.98% 0.00% 0.00%) Profit Margin 0.0% 52 0.0% Return on Assets (ROA) 9.43% 0.00% 53 0.00% 0.0% 0.0% TABLE #3 18.00% 0.00% 0.00% 0.0% 0.0% Return on Equity (ROE) Earnings Per Share (EPS) End-of-year stock price $3.40 $0.00 $0.00 $0.00 55 0.0% $69.21 56 $0.00 $0.00 $0.00 0.0% Net Working Capital (NVC) $18,013,752 $0 $0 $0 0.0% 57 58 59 60 61 62 63 64 Calculate the estimated End of Year stock price by using the following formula: End-of year stock price2021 = P/E Ratio 2020 X Earnings Per Share (EPS)2021 6 Global Manufacturing, Inc. INCOME STATEMENT 7 2019 2020 89 0 1 $70,911,420 $48,113,332 $13,785,239 $85,218,840 57,181,806 16,873,362 9,012,849 11,163,672 12 13 TABLE #1 14 Total sales Cost of goods sold Administrative expense Earnings before interest, taxes, depreciation & amortization (EBITDA) Depreciation Earnings before interest & taxes.(EBIT) Interest expense Earnings Before Taxes (EBT) Taxes Net income Dividends Additions to Retained Earnings 15 16 1,700,510 7,312,339 1,390,284 5,922,055 1,243,632 4,678,423 1,169,606 3,508,818 2,027,160 9,136,512 1,603,312 7,533,200 1,581,972 5,951,228 1,487,807 4,463,421 17 18 19 20 21 24 Global Manufacturing, Inc. BALANCE SHEET 25 2019 2020 26 27 28 29 30 $2,836,450 8,509,350 20,351,550 31,697,350 22,975,245 $54,672,595 $1,851,754 $10,262,510 $23,144,820 35,259,084 $27,826,540 $63,085,624 31 32 33 34 TABLE #2 35 ASSETS Cash Accounts receivable Inventory Total Current Assets Net Fixed Assets TOTAL ASSETS LIABILITIES & STOCKHOLDER'S EQUITY Accounts payable Notes payable Total current liabilities Long-term debt TOTAL LIABILITIES Common stock Retained earnings* TOTAL STOCKHOLDERS' EQUITY TOTAL LIABILITIES & STOCKHOLDER'S EQUITY 36 37 38 $5,758,070 7,961,031 13,719,101 12,359,868 26,078,969 2,040,000 26,553,626 28,593,626 $7,151,072 10,094,260 17,245,332 12,783,245 30,028,577 2,040,000 31,017,047 33,057,047 39 40 41 42 $54,672,595 $63,085,624 43 44 45 Global Manufacturing, Inc. ADDITIONAL INFORMATION 46 Information 2019 2020 47 48 49 50 Depreciation as a % of net fixed assets Short-term interest expense Long-term interest expense Income tax rate Dividend payout ratio TABLE #3 7.68% 6.72% 6.92% 21.00% 25.00% 8.82% 7.12% 6.92% 21.00% 25.00% 51 52 Fixed assets as a percent of total capacity. 84.00% 91.00% 53 54 End of year stock price Number of common shares outstanding $67.13 1,750,000 $69.21 1,750,000 55 1 PRO FORMA 2021 (Financial Statements) Be sure to read the PRO-FORMA INSTRUCTIONS carefully before starting your calculations on this worksheet. 2 3 HELP: This problem is not in your textbook. See the CASE STUDY HELP files named and * TUTORIAL FOR PREPARING A PRO FORMA FORECAST - WITHOUT CORRECTIONS.pdf" and "TUTORIAL FOR PREPARING A PRO FORMA FORECAST - WITH CORRECTIONS.pdf" to guide you in doing each of the calculations. Also be sure to review the *08A-SAMPLE COMPANY PRO FORMA CORRECTIONS (calculation of key items).pdf" provided to help you setup your spreadsheet for these PRO FORMA calculations. 4 5 6 FINANCIAL DATA FOR 2020 Depreciation as a % of net fixed assets NOTE: Cells shaded in BLACK are the cells that require no calculations or input. 7 8.82% NOTE: Cells shaded in BLUE are the cel that are assumed to remain the same as they were in 2018. 8 Income tax rate 21.00% NOTE: Cells shaded in YELLOW are the cells you must provide the calculations. NOTE: Cells shaded in RED are the cells that will automatically fill-in. 25.00% Dividend payout ratio 9 Fixed assets as a percent of total capacity. 91.00% 10 11 PRO FORMA WITHOUT CORRECTIONS PRO FORMA WITH CORRECTIONS EFFECT OF MAKING CORRECTIONS 12 Actual Change = Pro Forma With Corrections - Pro Forma Without Corrections FORECAST FOR 2021 FORECAST FOR 2021 13 Actual Change % Change = Actual Change / Pro Forma Without Corrections % Change Global Manufacturing, Inc. 2020 Sustainable Growth Rate % = (Auto Transfer from GROWTH RATE worksheet 0.00% 0.00% 20.00195447% 14 INCOME STATEMENTS 15 16 Total sales estimate $85,218,840 $57,181,806 $16.873.362 $0 $0 17 $0 $0 0 $0 $0 $0 SEE INSTRUCTIONS IN TUTORALS 0.0% SEE INSTRUCTIONS IN TUTORALS 0.0% SEE INSTRUCTIONS IN TUTORALS 18 $0 $11, 163,672 $0 $0 $0 0.0% 19 Cost of goods sold Administrative expense Earnings before interest, taxes, depreciation & amortization (EBITDA) Depreciation Earnings before interest & taxes.(EBIT) Interest expense Earnings Before Taxes (EBT) 20 $0 TABLE #1 SEE INSTRUCTIONS IN TUTORALS 21 $0 $0 0.0% 2.027.160 $9,136,512 1.603.312 $7,533,200 Assume that the INTEREST EXPENSE stays the same as 2020 because you are assuming interest bearing debt will be the same as in 2020. 22 23 $0 0.0% $0 $0 1,603,312 $1,603,312 $0 $1,603,312 $0 $1,603,312 24 Taxes 0.0% 1,603,312 $1,603,312 -$336,696 $1,266,616 $316.654 $949,962 Assume that the TAX RATE stays the same as 2020. See the Tax rate shown above or on the FINANCIAL DATA worksheet. 25 1.581.972 $5,951,228 1.487.807 $4,463,421 Net income $0 $0 $0 26 Dividends Additions to Retained Earnings 0.0% 0.0% 0.0% $0 27 28 Assume that the Dividend Payout Ratio stays the same as 2020. See the Dividend Payout Ratio shown above or on the FINANCIAL DATA worksheet. 29 BALANCE SHEETS 30 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 0.0% SEE INSTRUCTIONS IN TUTORALS 0.0% SEE INSTRUCTIONS IN TUTORIALS 0.0% SEE INSTRUCTIONS IN TUTORALS 0.0% 0.0% SEE INSTRUCTIONS IN TUTORALS 0.0% $0 $0 ASSETS 31 32 Cash $1,851,754 33 Accounts receivable 10,262,510 34 Inventory 23.144.820 35 Total Current Assets 35,259,084 36 Net Fixed Assets 27_826 540 37 TOTAL ASSETS ######### LIABILITIES & STOCKHOLDER'S EQUITY 38 39 C Accounts payable 7,151,072 40 Notes payable 10.094,260 41 Total current liabilities 17,245,332 42 Long-term debt 12.783.245 43 TOTAL LIABILITIES 30,028,577 44 Common stock 2,040,000 45 Retained earnings 31.017.047 46 TOTAL STOCKHOLDERS' EQUITY 33.157.147 TOTAL LIABILITIES & $63,085,624 STOCKHOLDER'S EQUITY 47 TABLE #2 SEE INSTRUCTIONS IN TUTORALS Assume that Notes Payable and Long-Term Debt stay the same for 2020 so you can estimate the firm's External Funds Needed (EFN) more accurately. $0 $10,094,260 $10,094,260 $12,783,245 $22,877,505 $2,040,000 $0 $2.040.000 $0 $10,094,260 $10,094,260 $12,783,245 $22,877,505 $2,040,000 $0 $2.040.000 Common stock stays the same as 2020 because the major assumption of the Sustainable Growth Rate is that No New Common Stock is issued. $0 $0 0.0% SEE INSTRUCTIONS IN TUTORIALS 0.0% $24,917,505 $24,917,505 $0 0.0% External Funds Needed = $ol $0 $o 0.0% SEE INSTRUCTIONS IN TUTORIALS 48 49 50 IMPORTANT PERFORMANCE MEASURES 6.98% 0.00% 0.00%) Profit Margin 0.0% 52 0.0% Return on Assets (ROA) 9.43% 0.00% 53 0.00% 0.0% 0.0% TABLE #3 18.00% 0.00% 0.00% 0.0% 0.0% Return on Equity (ROE) Earnings Per Share (EPS) End-of-year stock price $3.40 $0.00 $0.00 $0.00 55 0.0% $69.21 56 $0.00 $0.00 $0.00 0.0% Net Working Capital (NVC) $18,013,752 $0 $0 $0 0.0% 57 58 59 60 61 62 63 64 Calculate the estimated End of Year stock price by using the following formula: End-of year stock price2021 = P/E Ratio 2020 X Earnings Per Share (EPS)2021