Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

In this assignment you will create a forecast for a fictitious company using the attached spreadsheet template. Input the following as assumptions in the assumption

In this assignment you will create a forecast for a fictitious company using the
attached spreadsheet template. Input the following as assumptions in the assumption
part of the spreadsheet (grey highlighted cells at the top of the spreadsheet) and then
reference those cells when projecting the appropriate income statement, balance sheet,
or break-even account. Do NOT hard code numbers into your projections.
Project 20242026 Income Statement and Balance Sheet.
Assumptions:
Sales growth rates in each of next 3 years: 15%,33%,40%
Operating expenses as % percentage of sales stays at 2023 level for
2024 then goes down by 1% in each of next two years (so, if was 20%
in 2023, forecast levels would be .20,.19,.18)
Cost of goods sold as % of sales stays at 2023 level for 2024 and then
improves by .03 in 2025 and by another .03 in 2026(remember, this is
an expense, so improves means it goes down)
40% tax rate
No dividends or new stock issued
Interest expense fixed at $400/ year
Bank loan and LT debt stay constant
2024 A/R days = year 2023 days, then decrease by 3 days in 2025 &
another 3 days in 2026
2024 Inventory days = year 2023 days then decrease by 3 days in
2024 & another 3 days 2026
A/P days stays at year 2023 days
Net fixed assets and accruals: Use 2023% of sales for 2024-2026
Required cash fixed at 1000
Calculate Additional Funds Needed as plug (to get Balance Sheet to
balance!)
Calculate 2024 breakeven revenues and units.
Assumptions:
Use line item operating expenses as fixed costs
Average price per unit is $60
There was no assumption provided for the break even analysis, it says in the instructions that you have to use the given assumptions for the break even account, I hope this helps, and thank you so much for helping me.
image text in transcribed

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Advanced Accounting Concepts And Practice

Authors: Arnold J. Pahler

9th Edition

0324233531, 978-0324233537

More Books

Students also viewed these Accounting questions

Question

1. What is game theory?

Answered: 1 week ago