Company: LUV

Use percent of sales method to forecast 2018 financial statements (income statement and balance sheet), using mergent online.

Use iteration calculations in Excel to eliminate DFN in the pro forma balance sheet if DFN is not equal to 0. Assumption: If DFN is a deficit, assume that 50% of the deficit amount will be raised using short-term debt and the other 50% will be raised using long-term debt. If DFN is a surplus, assume that 50% of the surplus will be used to reduce the outstanding short-term debt and the other 50% will be used to reduce the outstanding long-term debt. Set a dummy variable (0, 1) in Excel to control (disable/enable) the iterative calculations.