Income Statement 1^st Pass 2^nd Pass

Year 0 Forecast Year Forecast Year

Sales $ 6000 7800 7800

CGS 4900

Depr 500 1.3

EBIT $ 600

Interest 100

EBT $ 500

Taxes (25%) 125

Net Income $ 375

Div 100

Add to RE $ 275

Balance Sheet

Total Assets $2955 3842 3842

AP $ 56

NP 82 82 82

Accrued Wages 59

Current Liab $ 197

LTD 838

Common Stock 1068

Retained Earnings 852

T. Liab & Equity $ 2955

AFN

1 a. Calculate the proforma income statement and balance sheet assuming 30% growth (use the constant growth method and assume the company is at full capacity). Assume additional funds needed will come from 30% LTD and 70% from a common stock issue. Interest on the debt is 10% and the common stock will sell for $50 per share and pay $1 per share in dividends.