Financial Forecasting "We are growing too fast," said Mason. "I know I shouldn't complain, but we better have the capacity to fill the orders or we'll be hurting ourselves." Vicky and Mason Coleman started their oatmeal snacks company in 1998, upon the suggestions of their close friends who simply loved the way their oatmeal tasted. Mason, a former college gymnastics coach, insists that he never "intended to start a business," but the thought of being able to support his college team played a significant role in motivating him to go for it. After considerable help from local retailers and a sponsorship by a major bread company their firm, Oats 'R' Us, was established in 1998 and reached sales of over $4 million by 2004. Given the current trend of eating bealthy snacks and keeping fit, Mason was confident that sales would increase significantly over the next few years. The industry growth forecast had been estimated at 30% per year and Mason was confident that his firm would be able to at least achieve if not beat that rate of sales "We must plan for the future," said Vicky. "I think we've been playing it by ear for too long." Mason immediately called the treasurer, Jim Moroney, Jim, I need to know how much additional funding we are going to need for the next year," said Mason. "The growth rate of revenues should be between 25% and 40%. I would really appreciate if you can have the forecast on my desk by early next week." im knew that his fishing plans for the weekend had better be put aside since it was going to be a long and busy weekend for him. He immediately asked the accounting department to give him the last three years' financial statements (see Tables 1 and 2) and got right to workl Table 1 Oats 'R' Us Income Statement 4,700,000 3,760,000 3,000,000 400,000 045 Cost of Goods Sold Gross Profit Selling and G&A Expenses Ficed Expenses Depreciation Expense Earnings Before Interest and Taxes Interest Expense Earnings Before Taxes Taxes @ 40% Net Income Retained Earnings 822,500 714,400 ,000 275,000 250,000 215,000 90,000 90,000 90,000 3 25,000 432,500 349400 270,000 66,00066,000 366,500 283,400 204,000 146 600 11336081,600 68,000 19.900 170,040 131940 102024 73440