Central Perks Inc.

Income Statement

For the Year Ended Dec. $31,2023$

$20232022$

Sales $$3,946,250$ $$3,517,800$

Cost of Goods Sold $$3,331,250$ $$2,935,600$

Gross Profit $$615,000$ $$582,200$

Selling and G&A Expenses $$330,300$ $$240,000$

Fixed Expenses $$100,000$ $$100,000$

Depreciation Expense $$20,000$ $$18,900$

EBIT $$164,700$ $$223,300$

Interest Expense $$76,000$ $$62,500$

Earnings Before Taxes $$88,700$ $$160,800$

Taxes $$35,480$ $$64,320$

Net Income $$53,220$ $$96,480$

Notes:

Tax Rate $40\%$

Sales history Revenue COGS Forecast

$2019$ $$1,937,795$ $$1,609,455$

$2020$ $$2,150,952$ $$1,738,086$

$2021$ $$2,409,066$ $$2,042,210$

$2022$ $$3,517,800$ $$2,935,600$

$2023$ $$3,946,250$ $$3,331,250$

Central Perks Inc.

Balance Sheet

As of Dec. $31,2023$

Assets $20232022$

Cash and Equivalents $$53,300$ $$59,040$

Accounts Receivable $$412,050$ $$359,980$

Inventory $$856,900$ $$733,080$

Total Current Assets $$1,322,250$ $$1,152,100$

Plant & Equipment $$540,175$ $$503,275$

Accumulated Depreciation $$166,200$ $$146,200$

Net Fixed Assets $$373,975$ $$357,075$

Total Assets $$1,696,225$ $$1,509,175$

Liabilities and Owner's Equity

Accounts Payable $$179,580$ $$149,240$

Short$-$term Notes Payable $$230,625$ $$205,000$

Other Current Liabilities $$143,500$ $$139,400$

Total Current Liabilities $$553,705$ $$493,640$

Long$-$term Debt $$435,227$ $$331,518$

Total Liabilities $$988,932$ $$825,158$

Common Stock $$471,500$ $$471,500$

Retained Earnings $$231,638$ $$208,862$

Total Shareholder's Equity $$703,138$ $$680,362$

Total Liabilities and Owner's Equity $$1,692,070$ $$1,505,520$

Central Perks Inc.

Statement of Cash Flows

For the Year Ended Dec. $31,2023($$ in $000\text{'}$s$)$

Cash Flows from Operations

Net Income $$53,220$

Depreciation Expense $$20,000$

Change in Accounts Receivable $$(52,070)$

Change in Inventories $$(123,820)$

Change in Accounts Payable $$30,340$

Change in Other Current Liabilities $$4,100$

Total Cash Flows from Operations $$(68,230)$

Cash Flows from Investing

Change in Plant & Equipment $$(36,900)$

Total Cash Flows from Investing $$(36,900)$

Cash Flows from Financing

Change in Short$-$term Notes Payable $$25,625$

Change in Long$-$term Debt $$103,710$

Change in Common Stock $$-$

Cash Dividends Paid to Shareholders $$(30,445)$

Total Cash Flows from Financing $$98,890$

Net Change in Cash Balance $$(6,240)$ The Income statement and balance sheet for Central Perks Inc. are provided here. Note that firm's capital expenditures are

expected to rise by $$50,000$ in the new year. This will lead to an increase of $$5,000$ in total depreciation expense from $2023.2024$

Sales should be $$4,407,500,$ and the dividend payment to common stockholders will equal the dividend payment in $2023.$ Cost of

Goods Sold, S$,$G&A Expense, Interest Expense, Accounts Receivable, Inventory, Accounts Payable, and Other Current Liabilities will

vary with sales. Cash, Notes Payable, Long$-$Term Debt, and Common Stock will remain the same as in $2023.$

Using the information given and percentage of sales analysis techniques where appropriate, prepare a pro forma income

statement and balance sheet for the next year. Since both $2022$ and $2023$ financial statements are given, use the average

percentage of sales from both years. Calculate the amount of financing needed for the balance sheet.

Create a chart of sales by year for all years, including your pro forma estimate.

Add a trend line.

Create a scatter plot of sales vs$.$ cogs. Add a trend line.

Regress cogs against sales $($do not include the $2024$ estimates$).$

Using your sales trendline and annual sales data forecast the sales level in the next $3$ years $(3$ years after the year with $4\mathrm{.}4075M$

in sales$).$ Forecast using the trend line as well as at least one of the following: trend, linest, regression.