Percent of Sales Technique Homework XYZ Company Income Statement For the Year Ended 12/31/xxxx Sales $140,000 Cost of Goods Sold 117,000 Gross Profit 23,000 Operating Expenses 12,830 EBIT 10,170 Interest Expense 4,610 EBT 5,560 Taxes @ 39% 2,168 Net Income 3,392 Dividend 1,018 Addition to Retained Earnings $2,374 ------------------------------------------------------------------------------------ XYZ Company Balance Sheet 12/31/xxxx Assets Current Assets Cash $7,500 Accounts Receivable 12,100 Inventory 10,400 Prepaid Items 5,900 Other CA 4,300 Total Current Assets $40,200 Net Plant & Equipment 82,300 Total Assets $122,500 XYZ Company Balance Sheet 12/31/xxxx Liabilities & Equity Current Liabilities Accounts Payable $7,200 Wages Payable 3,600 Notes Payable 5,400 Taxes Payable 4,200 Total Current Liabilities $20,400 Long Term Debt 35,700 Total Liabilities $56,100 Common Stock 28,700 Retained Earnings 37,700 Total Liabilities & Equity $122,500 ---------------------------------------------------------------------- |The projected sales for the forecast period is $165,000. Assume that the existing profit margin and payout ratio will be maintained in the forecast period. The firm estimates that additional net fixed asset investment of $18,000 will be required during the forecast period. Assume that all current assets are spontaneous except Other Current Assets which is assumed not to change. Assume that all current liabilities except Notes Payable are spontaneous. A. Prepare the pro forma Balance Sheet and pro forma Income Statement.The EFR will be shown as a plug number on the balance sheet like in the class example. B. Using the existing financial statements as your basis, estimate firm XYZ