Create 4 pro formas : Your Proformas should include a beginning point at 06/30/14 with a 6-month stub-year (BE SURE TO TAKE NOTE THE EXERCISE HAS A STUB YEAR - this impacts your pro-forma calculations) , then YE 12/31/14, 12/31/15, 12/31/16, 12/31/17, 12/31/18, & 12/31/19.
***CREATE INCOME STATEMENT PRO FORMA 1ST***
**USING THESE CATEGORIES***
Southwest Trading Company Assumptions: Cost of Goods Sold Days A/R Inventory turnover Days Accts Pay Sales Projections G&A Expenses Other Expenses Selling expenses Depreciation Tax Rate 63.00% of sales 48.00 Days 3.00 times 28.00 Days 2014 2015 2016 2017+ $275,000 $675,000 $800,000 $900,000 $70,000 $100,000 $120,000 $120,000 $30,000 SO SO SO 12.00% of sales 10 yr. straight line 34.00% For your Pro-Forma Balance Sheet use the following categories: 06/01/14 12/31/14......... ( (hold constant) Cash Accounts Receivable Inventory Gross Fixed Assets Less Accumulated Depreciation Net Plant & Equipment: TOTAL ASSETS (hold constant) (increases each yr.) (decreases each yr.) Accounts Payable Notes Payable Equity (hold constant at sister's loan art) (decreases or increases based on earnings) Loan Needs (mkt. secs) TOTAL LIABILITIES & EQUITY (including new loan needs) Change Financing Needs (this is the Financing/Loan balance) 12/31/14 For your Pro-Forma Income Statement use the following categories: 06/01/14 SALES Cost of Goods Sold Gross Margin Selling & Administrative Expenses G&A Expenses Depreciation Other Total Operating Expenses Earnings before Taxes Taxes @ 34% Net Income Average Daily Sales For your Pro-Forma Cash Budget uses the following categories: CASH SALES: Net Sales Less Change in A/R TOTAL CASH RECEIPTS CASH DISBURSEMENTS: COGS Less change in inventory Plus Change in A/P Total Cash Purchases Total Operating Expenses Plus Depreciation Less Taxes Paid TOTAL CASH DISBURSEMENTS CASH FLOW FROM OPERATIONS Capital Expenditures Change in Stock & Long-term debt Change in Financing/Loan Needs Change in Cash ($20,000 initially then use the loan need as your plug - this s/b $0 after start date) For your Pro-Forma Collateral Schedule use the following categories: COLLATERAL SCHEDULE: Cash (Remains constant at the $20,000 opening balance) Accounts Receivable (at borrowing base advance rate) Inventory (at borrowing base advance rate) Building (lower of cost or value at borrowing advance rate) Total Available Collateral Value Financing/Loan Balance Outstanding EXCESS/DEFICIT COLLATERAL VALUE COVERAGE RATIO (Available Collateral Value/Financing or Loan Balance) RATIO ANALYSIS MAY PROVE HELPFUL, BUT REMEMBER THIS IS ALL PROFORM Southwest Trading Company Assumptions: Cost of Goods Sold Days A/R Inventory turnover Days Accts Pay Sales Projections G&A Expenses Other Expenses Selling expenses Depreciation Tax Rate 63.00% of sales 48.00 Days 3.00 times 28.00 Days 2014 2015 2016 2017+ $275,000 $675,000 $800,000 $900,000 $70,000 $100,000 $120,000 $120,000 $30,000 SO SO SO 12.00% of sales 10 yr. straight line 34.00% For your Pro-Forma Balance Sheet use the following categories: 06/01/14 12/31/14......... ( (hold constant) Cash Accounts Receivable Inventory Gross Fixed Assets Less Accumulated Depreciation Net Plant & Equipment: TOTAL ASSETS (hold constant) (increases each yr.) (decreases each yr.) Accounts Payable Notes Payable Equity (hold constant at sister's loan art) (decreases or increases based on earnings) Loan Needs (mkt. secs) TOTAL LIABILITIES & EQUITY (including new loan needs) Change Financing Needs (this is the Financing/Loan balance) 12/31/14 For your Pro-Forma Income Statement use the following categories: 06/01/14 SALES Cost of Goods Sold Gross Margin Selling & Administrative Expenses G&A Expenses Depreciation Other Total Operating Expenses Earnings before Taxes Taxes @ 34% Net Income Average Daily Sales For your Pro-Forma Cash Budget uses the following categories: CASH SALES: Net Sales Less Change in A/R TOTAL CASH RECEIPTS CASH DISBURSEMENTS: COGS Less change in inventory Plus Change in A/P Total Cash Purchases Total Operating Expenses Plus Depreciation Less Taxes Paid TOTAL CASH DISBURSEMENTS CASH FLOW FROM OPERATIONS Capital Expenditures Change in Stock & Long-term debt Change in Financing/Loan Needs Change in Cash ($20,000 initially then use the loan need as your plug - this s/b $0 after start date) For your Pro-Forma Collateral Schedule use the following categories: COLLATERAL SCHEDULE: Cash (Remains constant at the $20,000 opening balance) Accounts Receivable (at borrowing base advance rate) Inventory (at borrowing base advance rate) Building (lower of cost or value at borrowing advance rate) Total Available Collateral Value Financing/Loan Balance Outstanding EXCESS/DEFICIT COLLATERAL VALUE COVERAGE RATIO (Available Collateral Value/Financing or Loan Balance) RATIO ANALYSIS MAY PROVE HELPFUL, BUT REMEMBER THIS IS ALL PROFORM
