Evaluate the financial statements of the company Pure Nature.

Use the financial information of these states and further provided herein to prepare the

financial plan of the company for the year 20X7.

Consider the following data:

1) To. It is estimated that sales for 20X7 will be $ 6,000,000.

2) The cost of goods sold (COGS) in 20X6 includes $ 1,000,000 in fixed costs.

3) Operating expenses in the 20X6 include $ 250,000 in fixed costs.

4) Interest expense (interest expense) will remain unchanged.

5) Based on 40% of profits after tax dividends (net be paid

profits after taxes)

6) Cash (cash) and inventories (inventories) will double.

7) The marketable securities, notes payable, long-term debt and common stock,

they remain the same.

8) The accounts receivable, accounts payable and other current liabilities will change

directly related to the change in sales.

9) A new computer system worth $ 356,000 will be purchased during the year.

10) Depreciation expense for the year is $ 110,000.

11) The tax rate remains at 40%.

Instructions:

1. Prepare a statement of income and expenses pro fit for the year ending 20x7

using the method of percentage of sales.

2. Prepare a balance sheet pro forma as of 31 December 20X7 using the method

Administrative assumptions (judgmental approach).

3. Analyze the use of pro forma statements. Why they are performed? What is the role?

4. Analyzes states and discusses whether or not you need an external financing (external

financing). Give reasons for your answer.

*** IT IS VERY IMPORTAR TO COMPLETE THE ENTIRE EXERSICE ** INCLUDE ALL THE CALCULATIONS, THANK

Balance Sheet December 31, 20x6 Assets Cash Marketable securities Account Receivable Inventories 200,000 225,000 625,000 500,000 $1,550,000 1400,000 $2,950,000 Total current assets Net fixed assets Total assets Liabilities and Stockholder's Equity Accounts payable Notes Payable Other current liabilities 700,000 295,000 5,000 $1,000,000 Total current liabilities Long Term debt Total liabilities Common Stock Retained Earnings 1,500,000 $ 75,000 1,375,000 Total Stockholder's Equity $1450,000 $2,950,000 Total Stockholder's Equity and liabilities