find a correct blance for asset = liability+ equity for forcast 1996 and 1997
Case 1 Tire City, Inc Background - 1995 sales $23,505,000. Net income 1,190,000 - Last 3 years sales grown in excess of 20% -Loan annual instalments of $125,000. balance due $875,000 - TCI planned to invest -$2,000,000 1996 and $400,000 1997 Case 1 Tire City, Inc 1997 depreciation expense of 5%. inventory End of 1995, $2,190,000 End of 1996, $1,625,000 End of 1997, same proportional to sales 1995. Operating margins expected to be consistent Taxes , dividend payout Case 1 Tire City, Inc The loan Repaid in 4 equal annual instalments. The first in 1998 28.206,000 Interest rate 10% For years ending 12/31 1993 1994 1995 INCOME STATEMENT $ 16,230 9,430 6,800 $ 20,355 11,898 8,457 $ 23,505 13,612 9,893 Net sales Cost of sales Gross Profit Selling, general, and administrative expenses Depreciation Net interest expense Pre-tax income Income taxes Net income 5,195 160 119 1,326 546 $ 780 6,352 180 106 1,819 822 $ 997 7,471 213 94 2,115 925 $ 1,190 Dividends $ 155 $ 200 $ 240 Exhibit 1 Inc Financial Statements for Tire City, For years ending 12/31 1993 1994 1995 % of sales 1996 INCOME STATEMENT Net sales Cost of sales Gross Profit $ 16,230 9,430 6,800 $ 20,355 11,898 8,457 $ 23,505 13,612 9,893 57.91% 28,206 16334 11872 Selling, general, and administrative expenses Depreciation Net interest expense Pre-tax income Income taxes Net income 5,195 160 119 1,326 546 $ 780 6,352 180 106 1,819 822 $ 997 7,471 213 94 2,115 925 $ 1,190 31.78% 0.91% 0.40% 9.00% 43.74% 5.06% 8965 256 271 2380 1041 1339 Dividends $ 155 $ 200 $ 240 240 Exhibit 1 Inc Financial Statements for Tire City, For years ending 12/31 1993 1994 1995 % of sales 1996 INCOME STATEMENT Net sales Cost of sales Gross Profit $ 16,230 9,430 6,800 $ 20,355 11,898 8,457 $ 23,505 13,612 9,893 57.91% 28,206 16334 11872 Selling, general, and administrative expenses Depreciation Net interest expense Pre-tax income Income taxes Net income 5,195 160 119 1,326 546 $ 780 6,352 180 106 1,819 822 $ 997 7,471 213 94 2,115 925 $ 1,190 31.78% 0.91% 0.40% 9.00% 43.74% 5.06% 8965 256 271 2380 1041 1339 Dividends $ 155 $ 200 $ 240 240 tatements Inc. For years ending 12/31 1993 1994 1995 % of sales 1996 1997 INCOME STATEMENT $ Net sales Cost of sales Gross Profit $ 16,230 9,430 6,800 $ 20,355 11,898 8,457 $ 23,505 13,612 9,893 57.91% 28,206 16334 11872 33,847 19601 14246 Selling, general, and administrative expenses Depreciation Net interest expense Pre-tax income Income taxes Net income 5,195 160 119 1,326 546 $ 780 6,352 180 106 1,819 822 $ 997 7,471 213 94 2,115 925 $ 1,190 31.78% 0.91% 0.40% 9.00% 43.74% 5.06% 8965 256 271 2380 1041 1339 10758 427 299 2762 1208 1554 Dividends $ 155 $ 200 $ 240 240 240 1993 1994 1995 % of sales 1996 1997 BALANCE SHEET For years ending 12/31 Assets Cash balances Accounts receivable Inventories Total current assets $ 508 2,545 1,630 $ 609 3,095 1,838 $ 706 3,652 2,190 3.00% 15.54% 9.32% 847 4,382 1,625 1,017 5,259 3,154 4,683 5,542 6,548 27.86% 6,855 9,429 3,232 1,335 3,795 1,515 Gross plant & equipment Accumulated depreciation Net plant & equipment 4,163 1,728 17.71% 41.51% 6,163 1,941 6,563 2,274 1,897 2,280 2,435 4,222 4,289 Total assets $ 6,580 $ 7,822 $ 8,983 11,077 13,718 1993 1994 1995 % of sales 1996 1997 For years ending 12/31 Liabilities Current maturities Accounts payable Accrued expenses Total current liabilities $ 125 1,042 1,145 $ 125 1,325 1,432 $ 125 1,440 1,653 0.53% 6.13% 7.03% 125 1,728 1.984 125 2,074 2,380 2,312 2,882 3,218 3,837 4,579 Long-term debt 1,000 875 750 3.19% 2,625 2,900 1,135 4.83% 1,135 1,135 2,133 1,135 3,880 1,135 6,256 2,930 16.51% 4,971 Common stock Retained earnings Total shareholders' equity 3,268 4,065 5,015 6,106 7.391 Total liabilities and Equity $ 6,580 $ 7,822 $ 8,983 12,567 14,870 IS wrong 11 of 11 For years ending 12/31 1993 1994 1995 % of sales 1996 1997 Total assets $ 6,580 $ 7,822 $ 8,983 11.077 13,718 Total liabilities and Equity $ 6,580 $ 7,822 $ 8,983 12,567 14,870 Case 1 Tire City, Inc Background - 1995 sales $23,505,000. Net income 1,190,000 - Last 3 years sales grown in excess of 20% -Loan annual instalments of $125,000. balance due $875,000 - TCI planned to invest -$2,000,000 1996 and $400,000 1997 Case 1 Tire City, Inc 1997 depreciation expense of 5%. inventory End of 1995, $2,190,000 End of 1996, $1,625,000 End of 1997, same proportional to sales 1995. Operating margins expected to be consistent Taxes , dividend payout Case 1 Tire City, Inc The loan Repaid in 4 equal annual instalments. The first in 1998 28.206,000 Interest rate 10% For years ending 12/31 1993 1994 1995 INCOME STATEMENT $ 16,230 9,430 6,800 $ 20,355 11,898 8,457 $ 23,505 13,612 9,893 Net sales Cost of sales Gross Profit Selling, general, and administrative expenses Depreciation Net interest expense Pre-tax income Income taxes Net income 5,195 160 119 1,326 546 $ 780 6,352 180 106 1,819 822 $ 997 7,471 213 94 2,115 925 $ 1,190 Dividends $ 155 $ 200 $ 240 Exhibit 1 Inc Financial Statements for Tire City, For years ending 12/31 1993 1994 1995 % of sales 1996 INCOME STATEMENT Net sales Cost of sales Gross Profit $ 16,230 9,430 6,800 $ 20,355 11,898 8,457 $ 23,505 13,612 9,893 57.91% 28,206 16334 11872 Selling, general, and administrative expenses Depreciation Net interest expense Pre-tax income Income taxes Net income 5,195 160 119 1,326 546 $ 780 6,352 180 106 1,819 822 $ 997 7,471 213 94 2,115 925 $ 1,190 31.78% 0.91% 0.40% 9.00% 43.74% 5.06% 8965 256 271 2380 1041 1339 Dividends $ 155 $ 200 $ 240 240 Exhibit 1 Inc Financial Statements for Tire City, For years ending 12/31 1993 1994 1995 % of sales 1996 INCOME STATEMENT Net sales Cost of sales Gross Profit $ 16,230 9,430 6,800 $ 20,355 11,898 8,457 $ 23,505 13,612 9,893 57.91% 28,206 16334 11872 Selling, general, and administrative expenses Depreciation Net interest expense Pre-tax income Income taxes Net income 5,195 160 119 1,326 546 $ 780 6,352 180 106 1,819 822 $ 997 7,471 213 94 2,115 925 $ 1,190 31.78% 0.91% 0.40% 9.00% 43.74% 5.06% 8965 256 271 2380 1041 1339 Dividends $ 155 $ 200 $ 240 240 tatements Inc. For years ending 12/31 1993 1994 1995 % of sales 1996 1997 INCOME STATEMENT $ Net sales Cost of sales Gross Profit $ 16,230 9,430 6,800 $ 20,355 11,898 8,457 $ 23,505 13,612 9,893 57.91% 28,206 16334 11872 33,847 19601 14246 Selling, general, and administrative expenses Depreciation Net interest expense Pre-tax income Income taxes Net income 5,195 160 119 1,326 546 $ 780 6,352 180 106 1,819 822 $ 997 7,471 213 94 2,115 925 $ 1,190 31.78% 0.91% 0.40% 9.00% 43.74% 5.06% 8965 256 271 2380 1041 1339 10758 427 299 2762 1208 1554 Dividends $ 155 $ 200 $ 240 240 240 1993 1994 1995 % of sales 1996 1997 BALANCE SHEET For years ending 12/31 Assets Cash balances Accounts receivable Inventories Total current assets $ 508 2,545 1,630 $ 609 3,095 1,838 $ 706 3,652 2,190 3.00% 15.54% 9.32% 847 4,382 1,625 1,017 5,259 3,154 4,683 5,542 6,548 27.86% 6,855 9,429 3,232 1,335 3,795 1,515 Gross plant & equipment Accumulated depreciation Net plant & equipment 4,163 1,728 17.71% 41.51% 6,163 1,941 6,563 2,274 1,897 2,280 2,435 4,222 4,289 Total assets $ 6,580 $ 7,822 $ 8,983 11,077 13,718 1993 1994 1995 % of sales 1996 1997 For years ending 12/31 Liabilities Current maturities Accounts payable Accrued expenses Total current liabilities $ 125 1,042 1,145 $ 125 1,325 1,432 $ 125 1,440 1,653 0.53% 6.13% 7.03% 125 1,728 1.984 125 2,074 2,380 2,312 2,882 3,218 3,837 4,579 Long-term debt 1,000 875 750 3.19% 2,625 2,900 1,135 4.83% 1,135 1,135 2,133 1,135 3,880 1,135 6,256 2,930 16.51% 4,971 Common stock Retained earnings Total shareholders' equity 3,268 4,065 5,015 6,106 7.391 Total liabilities and Equity $ 6,580 $ 7,822 $ 8,983 12,567 14,870 IS wrong 11 of 11 For years ending 12/31 1993 1994 1995 % of sales 1996 1997 Total assets $ 6,580 $ 7,822 $ 8,983 11.077 13,718 Total liabilities and Equity $ 6,580 $ 7,822 $ 8,983 12,567 14,870
