Last year your company had sales of $ 18 million, its cash was $ 1 million receivables $ 4 million, inventory $ 7 million, fixed assets $ 8 million, long-term loans $ 4 million, short-term loans $ 1 million, spontaneously generated liabilities (account payable and accruals) $ 4 million, its profit margin was 8% and its dividend payout ratio 50%.

1. Assuming an annual growth in sales of 20%, constant ratios, and the financing of all additional funds needed by short-term loans, create pro-forma financial statements for the next two years
2. Calculate the actual and projected values of the leverage ratio, current ratio, and return on equity
3. Calculate the actual and projected values of the total assets turnover ratio, fixed assets turnover ratio, inventory turnover ratio, and days sales outstanding.
4. Benchmarking against other companies in your industry, you find that in order to retain your rating and access to market financing your leverage should not exceed 0.40 and your current ratio should not fall beneath 2.00. What are the various measures you could possibly take in order to achieve these targets? What would be their respective advantages and disadvantages?
5. Design a financing strategy that you believe would best meet the criteria of financial stability, low transaction costs, and maximizing the return on equity. Create the pro-forma financial statements for such a strategy and explain the strategy.