Module Case The CFO of Forecast Industries Co provided you with the company's financial statements for 2019 and 2020: Forecast Industries Balance Sheet As of Dec 31 of years 2019 and 2020 2019 2020 Assets Cash Accounts Receivable Inventories Property, Plant and Equipment Accumulated Depreciation Total Assets $269,167 $19,210 $510,000 $2,975,000 $821,667 $2,951,710 $359,983 $30,756 $556,042 $2,975,000 -$830, 167 $3,091,613 Liabilities Accounts Payable Accrued Taxes Additional short-term debt* Bank Loan Total Liablities $382,500 $127,500 $0 $0 $510,000 $435,491 $42,883 $0 $0 $478,373 Stockholder's Equity Common Stock Retained Earnings Total Stockholders Equity $566,667 $1,875,044 $2,441,710 $566,667 $2,046,574 $2,613,240 Total Liabilities+Equity $2,951,710 $3,091,613 Forecast Industries Income Statement For the years ended on Dec 31 of 2019 and 2020 Sales (-) COGS (-) Variable S&A Contribution Margin Total Fixed Admin. Expenses Total Fixed Selling Expenses Operating Income (-)Financjal Expenses E) Earnings before Tax - Tax Expense =) Net Income $1,468,750 $897,917 $72,188 $498,646 $91.667 $91,667 $315,313 $0 $315,313 $63,063 $252,250 Additional Data 2021 2022 2023 Expected Sales Growth 2.60% 1.30% 0.87% COGS to Sales 62% 60% 59% Selling and Administrative 5% higher than in Expenses Same as in 2021 2020 5% higher than 2022 A/R Turnover 5 5 Inventory Turnover 10 11 11 A/P Turnover 9 8 7 Increase in PP&E 6.00% 3% 3% $840000 plus 10% of Depreciation expense Depreciation expense Depreciation Expense any addition to PPE of 2021 plus 10% of of 2022 plus 10% of during the year any addition to PPE any addition to PPE during the year during the year Interest Rate (% over the balance as of Dec. 31 of the prior year) 11.00% 11.00% 11.00% Long-Term Debt Balance $578,000.00 10% higher than in 10% lower than in 2021 2022 Minimum Cash Balance (As a % of 10% Sales) 10% 10% Dividend payout 30% 30% 30% Accrued Tax to Tax Expense Same proportion as in same proportion as in same proportion as in 2020 2020 2020 Tax rate 30% 30% 30% Used only if cash is Used only if cash is Used only if cash is Short term debt needed to meet at needed to meet at needed to meet at least the minimum least the minimum least the minimum cash balance cash balance cash balance Prepare the proforma Balance Sheet and Income Statement for 2021, 2022 and 2023