Go back to the financial analysis spreadsheet from Homework #5 that you prepared in Excel for the Talat-Nabil Construction company. Make assumptions about historical financial ratios and historical income statement ratios. Then, create pro forma income statements that show the revenues of the company growing 100% per year for three years. In other words, the revenues of Talat-Nabil double each year. Using those pro forma income statements and the financial ratio assumptions you have made do the following for the next three years:

hold the cash constant at $50,

hold the land constant at $75

grow the accounts receivables by your assumed days in aging,

grow the inventory by your assumed inventory turnover

grow the PP&E using reasonable assumptions

grow the accounts payables by your assumed days in aging,

keep Notes Payable equal to zero ($0)

keep PIC constant at $40

grow the retained earnings by the income (profit) from the last period

add the asset side of the balance sheet to determine total assets

add the liabilities and equities side of the balance sheet (excluding Long Term Debt) to determine total liabilities and equities without long term debt.

Plug-in the long term debt that will make your balance sheet balance.

This plug figure is in effect the financing need of the company. A growing plug figure means that the company will need more and more external financing such as debt, paid-in-capital, or cash from a rich uncle. A declining plug figure means that the company generates cash and has to put the cash to good use.

What is your plug figure? How does it change over time?

What are the external financing needs of Talat-Nabil? What assumptions are critical to your model of the companys future performance? If you changed various assumptions, how would that impact the outcome of your model?

How clean and neat of a normalized spreadsheet can you create to run your scenario analyses? Who will win the easiest to read contest?