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A - - Times New... 12 A A Aa A A BI U rabxx' ArouAvA arv r 2 T LIFT TRUCK ATTACHMENTS, INC, FINANCIAL FORECAST

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A - - Times New... 12 A A Aa A A BI U rabxx' ArouAvA arv r 2 T 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: 1. Net sales are forecasted to total $2.7 million, a drop from 2015 to 2016. Net sales are expected to improve in 2017 to a level of $3 million 2. Gross profits are expected to drop to 36% of sales for the entire year 2016 and to drop further to 35% of net sales in 2017. 3. Sales expenses are projected to increase in the second half of 2016 with the total year 2016 amounting to $169,000. Sales expenses for 2017 are projected to increase by 5% over those in 2016. 4. Administrative expenses are expected to increase to a projected $452,400 for all of 2016 and to $481,200 in 2017. 5. Depreciation will amount to $36,300 for all of 2016 and $20,000 for 2017. 6. Other expense will increase to $27,800 for all of 2016 and will amount to $20,800 in 2017. (This results from substantial increases in interest costs resulting from acquisition debt.) 7. Income taxes include both state and federal taxes and will amount to 32.69% of pretax profits in 2016 and 39.22% of pretax profits in 2017. (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.) 8. There will be no profit sharing bonuses in 2016 and 2017. 9. Accounts receivable will amount to 43 days of sales at the end of 2016 and will hold at the same dollar figure at the end of 2017. (Hint: Don't enter cash into the balance sheet initially. Use cash as the "plug" figure.) 10. Inventory at the end of 2016 will amount to 59.07days of 2016 Cost of Sales and will hold the same dollar figure at the end of 2017. 11. Prepaid expenses will amount to the same dollar figure at the end of 2016 and 2017 as it was on April 30, 2016. 12. There will be no additions to fixed assets in the last fiscal half of 2016 and additions to fixed assets will amount to $20,000 during 2017 3. The current portion of long term debt will amount to $49,700 at the end of 2016 and 542,300 at the end of 2017. 14. Accounts payable will amount to 35,43 days of 2016 cost of sales at the end of 2016 and will amount to 35.04 days of 2017 projected cost of sales. 15. Accrued expenses will amount to $38,400 at the end of 2016 and $40,000 at the end of 2017. 16. Long term debt net of the current portion will amount to $182,700 at the end of 2016 and to $140,400 at the end of 2017 17. Common stock will remain at $9,800 at the end of 2016 and 2017 18. Retained earnings will increase or decrease by the amount of after tax profit or loss during the period covered by the statements 19. There will be no distributions from retained earnings to shareholders during the forecast period ASSIGNMENT English (United States) Focus D- - A z 1 General Comments on the Lift Truck Attachments Case Do the forecast in the order: (1) Income Statement first; (2) balance sheet next; (3) Statement of Cash Flows last Ignore the 6 months figures in the Income Statement and the Statement of Cash Flows until you have finished all other parts of the forecast. The figures for the second half of year one are just the result of subtracting the figures for the first half of year one from the total year figures for year one. Do that calculation after everything else is finished. Follow the instructions on the Financial Forecast" sheet. Income statement: O Forecasters will often forecast what the Gross Profit will be in the future and then back into the Cost of Sales figures. That is what is done in this forecast. O Depreciation is a non-cash charge to expense gradually the total investment in an asset. One year's portion of the expense is charged in each year's income statement until the entire investment has been depreciated. Only the year's depreciation is shown on the year's income statement. An accumulation of all of the depreciation charges for a particular item is shown on the balance sheet. (Year to year depreciation is added each year to the prior year's accumulated depreciation on the balance sheet.) O Profit After Tax & Bonus is an item on the income statement that adds to the retained earnings of the company each period. This number, if profitable, adds to retained earnings on the balance sheet and, if negative, deducts from the retained earnings on the balance sheet. Balance Sheet: O Cash is the last item to put in the balance sheet when forecasting. It is a "plug" figure to make the balance sheet balance. If it is positive, that is a good result. If it is negative, you must do something to make it positive (such as borrowing money, increasing profits, reducing accounts receivable or inventory, or increasing account payable). In this exercise, the cash should in all cases be positive if your numbers are entered correctly. Accounts receivable (A/R) is often forecasted by using a "day's sales" figure based upon historical collection periods for accounts receivable. In this forecast we use days of sales in accounts receivable. To figure the A/R we take the year's net sales and divide by 365. Then the result from this division (one day's sales) is multiplied by the days sales estimated for A/R in this forecast (43 days in the first year of our forecast) to give you the A/R number to go in your forecasted balance sheet. Inventory days and Accounts Payable days are handled in a manner similar to English (United States) Focus Page Layout Formulas Data Review View Home - 023 Insert x v Draw fx LR Truck Attachments, Inc 2017 For Year Ending Year Ending Year Ending Year Ending 2013101214132017021 6 Mo. Ended Me Ended Forecast Year Ending forecast Your Ending Net Sales $2,100 2 $2,723 2 $2,841.4 $1,343.6 Cost of Sales $1.468.8 $1.8076 $1.839.0 $8328 15 Gross Proff $631.4 $915.6 $1,002.4 $510.8 Expenses: Seling Expenses Admin Expenses Depreciation Total Expenses 22 evi 18 19 2 CO2 un 22 un wer > $59.71 $219.00 $177.5 $504,5 $8.1 $690.11 $126.7 $374.7 $9.0 $5104 $121.0 $721 $1721 $4452 $20.6 $6379 $285.9 Operating profits $225.5 $384.5 $224.9 Other Expenses (Income) $18.7 $20.6 $242 repi Profit Before Income Tax $102.3 16. mer income $10.3 $920 $204.9 $195 s $185.4 $340.3 $14.6 $146 $325.7 $228.00 $59 $222.1 mol he Proft After Income Tax Prior to Profi Sharing Bc $57.9 $125.4 $260.0 $0.0 Proft After Tax & Bonus $34.1 $60.0 $66.7 $222.11 .CCO 5.04 wccn Long The e Com Retai cover There Inc. Stmt. Bal. Sheet Cash Flow + A - - Times New... 12 A A Aa A A BI U rabxx' ArouAvA arv r 2 T 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: 1. Net sales are forecasted to total $2.7 million, a drop from 2015 to 2016. Net sales are expected to improve in 2017 to a level of $3 million 2. Gross profits are expected to drop to 36% of sales for the entire year 2016 and to drop further to 35% of net sales in 2017. 3. Sales expenses are projected to increase in the second half of 2016 with the total year 2016 amounting to $169,000. Sales expenses for 2017 are projected to increase by 5% over those in 2016. 4. Administrative expenses are expected to increase to a projected $452,400 for all of 2016 and to $481,200 in 2017. 5. Depreciation will amount to $36,300 for all of 2016 and $20,000 for 2017. 6. Other expense will increase to $27,800 for all of 2016 and will amount to $20,800 in 2017. (This results from substantial increases in interest costs resulting from acquisition debt.) 7. Income taxes include both state and federal taxes and will amount to 32.69% of pretax profits in 2016 and 39.22% of pretax profits in 2017. (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.) 8. There will be no profit sharing bonuses in 2016 and 2017. 9. Accounts receivable will amount to 43 days of sales at the end of 2016 and will hold at the same dollar figure at the end of 2017. (Hint: Don't enter cash into the balance sheet initially. Use cash as the "plug" figure.) 10. Inventory at the end of 2016 will amount to 59.07days of 2016 Cost of Sales and will hold the same dollar figure at the end of 2017. 11. Prepaid expenses will amount to the same dollar figure at the end of 2016 and 2017 as it was on April 30, 2016. 12. There will be no additions to fixed assets in the last fiscal half of 2016 and additions to fixed assets will amount to $20,000 during 2017 3. The current portion of long term debt will amount to $49,700 at the end of 2016 and 542,300 at the end of 2017. 14. Accounts payable will amount to 35,43 days of 2016 cost of sales at the end of 2016 and will amount to 35.04 days of 2017 projected cost of sales. 15. Accrued expenses will amount to $38,400 at the end of 2016 and $40,000 at the end of 2017. 16. Long term debt net of the current portion will amount to $182,700 at the end of 2016 and to $140,400 at the end of 2017 17. Common stock will remain at $9,800 at the end of 2016 and 2017 18. Retained earnings will increase or decrease by the amount of after tax profit or loss during the period covered by the statements 19. There will be no distributions from retained earnings to shareholders during the forecast period ASSIGNMENT English (United States) Focus D- - A z 1 General Comments on the Lift Truck Attachments Case Do the forecast in the order: (1) Income Statement first; (2) balance sheet next; (3) Statement of Cash Flows last Ignore the 6 months figures in the Income Statement and the Statement of Cash Flows until you have finished all other parts of the forecast. The figures for the second half of year one are just the result of subtracting the figures for the first half of year one from the total year figures for year one. Do that calculation after everything else is finished. Follow the instructions on the Financial Forecast" sheet. Income statement: O Forecasters will often forecast what the Gross Profit will be in the future and then back into the Cost of Sales figures. That is what is done in this forecast. O Depreciation is a non-cash charge to expense gradually the total investment in an asset. One year's portion of the expense is charged in each year's income statement until the entire investment has been depreciated. Only the year's depreciation is shown on the year's income statement. An accumulation of all of the depreciation charges for a particular item is shown on the balance sheet. (Year to year depreciation is added each year to the prior year's accumulated depreciation on the balance sheet.) O Profit After Tax & Bonus is an item on the income statement that adds to the retained earnings of the company each period. This number, if profitable, adds to retained earnings on the balance sheet and, if negative, deducts from the retained earnings on the balance sheet. Balance Sheet: O Cash is the last item to put in the balance sheet when forecasting. It is a "plug" figure to make the balance sheet balance. If it is positive, that is a good result. If it is negative, you must do something to make it positive (such as borrowing money, increasing profits, reducing accounts receivable or inventory, or increasing account payable). In this exercise, the cash should in all cases be positive if your numbers are entered correctly. Accounts receivable (A/R) is often forecasted by using a "day's sales" figure based upon historical collection periods for accounts receivable. In this forecast we use days of sales in accounts receivable. To figure the A/R we take the year's net sales and divide by 365. Then the result from this division (one day's sales) is multiplied by the days sales estimated for A/R in this forecast (43 days in the first year of our forecast) to give you the A/R number to go in your forecasted balance sheet. Inventory days and Accounts Payable days are handled in a manner similar to English (United States) Focus Page Layout Formulas Data Review View Home - 023 Insert x v Draw fx LR Truck Attachments, Inc 2017 For Year Ending Year Ending Year Ending Year Ending 2013101214132017021 6 Mo. Ended Me Ended Forecast Year Ending forecast Your Ending Net Sales $2,100 2 $2,723 2 $2,841.4 $1,343.6 Cost of Sales $1.468.8 $1.8076 $1.839.0 $8328 15 Gross Proff $631.4 $915.6 $1,002.4 $510.8 Expenses: Seling Expenses Admin Expenses Depreciation Total Expenses 22 evi 18 19 2 CO2 un 22 un wer > $59.71 $219.00 $177.5 $504,5 $8.1 $690.11 $126.7 $374.7 $9.0 $5104 $121.0 $721 $1721 $4452 $20.6 $6379 $285.9 Operating profits $225.5 $384.5 $224.9 Other Expenses (Income) $18.7 $20.6 $242 repi Profit Before Income Tax $102.3 16. mer income $10.3 $920 $204.9 $195 s $185.4 $340.3 $14.6 $146 $325.7 $228.00 $59 $222.1 mol he Proft After Income Tax Prior to Profi Sharing Bc $57.9 $125.4 $260.0 $0.0 Proft After Tax & Bonus $34.1 $60.0 $66.7 $222.11 .CCO 5.04 wccn Long The e Com Retai cover There Inc. Stmt. Bal. Sheet Cash Flow +

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