Please help find the Three year pro formas for the balance sheet, income statement, and cash flow statement (indirect method)!!!!!!!!!!!!!!!!!!

Steve Mahre is president and owner of Steves Skis and Bikes, Inc. (SSB), a distributor of a broad range of sporting goods, apparel, and camping equipment. SSB's customers consisted of department stores, discount houses, ski shops and general sporting-goods shops. Steve is very concerned having learned that the companys cash balance had fallen to just about $9.2 thousand dollars as of December 31, 2017. Steve feared that this might not be adequate to support the companys current scale of operations and long term viability. The decline in cash was particularly worrisome to Steve because of difficulties he was currently experiencing with a number of the companys trade suppliers. These suppliers were pressing SSB for prompter payment of their invoices (implying a curtailment of the companys short term credit) which would severely limit prospects for continuing growth. A deeper fear was that some suppliers might cancel the companys exclusive distribution rights for their products. Moreover, with a low cash balance, it would be difficult for SSB to accelerate payments to suppliers. Purchase terms were typically 2/10, net 30, and SSB had often been unable to take advantage of prompt-payment discounts.

Steves first step upon learning of the cash crisis was to call Mr. Carl Grizzly, vice-president of Evergreen Bank. Evergreen had served as SSBs bank of account since the companys founding, and had provided financing for several years in the form of renewable short-term notes.

Steve asked Mr. Grizzly to increase the banks loan to $140,000 from its current level of $40,000, explaining that this would enable him to assuage some of his more strident suppliers, while providing a solid cash reserve for the company. Mr. Grizzly asked when the bank might expect SSB to repay the extra $100,000, and Steve replied that collection of accounts receivable should provide ample funds to reduce the loan to its customary level by the end of the year. Not being at that point entirely up-to-date regarding SSBs performance and financial condition, Mr. Grizzly promised to study the matter and to have an answer to the increased loan request within a few days. He mentioned that because credit conditions were tight, he would have to refer SSBs request to the banks loan review committee.

Pro-Forma Steve's Skis and Bikes Assumptions: Sales growth Collection period ( 30 days) % of discounts taken - calculated gross profit margin price increase Operating, Selling and Admin expenses tax rate dividend payout ratio interest rate on notes payable additional capital added by Steve \begin{tabular}{|c|c|c|c|c|c|c|} \hline 2010 & 2011 & 2012 & 2013 & 2014 & 2015 & 2016 \\ \hline \multicolumn{4}{|c|}{ Historical } & \multicolumn{3}{|c|}{ Forecasts } \\ \hline 2010 & 2011 & 2012 & 2013 & 2014 & 2015 & 2016 \\ \hline n/a & 49.1% & 50.3% & 33.1% & 30.0% & 30.0% & 30.0% \\ \hline 40.00 & 23.18 & 24.58 & 21.54 & 25.00 & 25.00 & 25.00 \\ \hline 9.00 & 10.20 & 9.53 & 10.29 & 9.00 & 9.00 & 9.00 \\ \hline 21.97 & 10.00 & 28.54 & 29.57 & 28.00 & 28.00 & 28.00 \\ \hline 1.2% & 0.0% & 1.8% & 1.9% & 1.9% & 1.9% & 1.9% \\ \hline 19.7% & 19.3% & 18.7% & 18.8% & 18.8% & 18.8% & 18.8% \\ \hline n/a & n/a & n/a & n/a & n/a & n/a & n/a \\ \hline 13.8% & 13.9% & 13.9% & 14.0% & 14.0% & 14.0% & 14.0% \\ \hline 44.0% & 44.0% & 44.0% & 44.0% & 44.0% & 44.0% & 44.0% \\ \hline 0.50 & 0.50 & 0.50 & 0.50 & 0.10 & 0.40 & 0.35 \\ \hline 2.5% & 3.9% & 4.8% & 4.8% & \#DIV/0! & \#DIV/0! & \#DIV/0! \\ \hline \end{tabular} GROWTH RATES FOR EXAMPLE ONLY AVG DAYS RECEIVABLE +/= Driven by sales growth change AVG DAYS INVENTORY +/- Driven by sales growth change and Daily COGS AVG DAYS PAYABLE +/= Driven by purchases and inventory change Directly related to how quickly he is going to treat his payables; no discount for paying late Won't change if using % of sales method you could increase by x% and increase profit margin but you would have to know the price elasticity you could reduce this by 1% and get a substantial increase in net profit and cash flow assume you can NOT change his tax rate this is open to any payout you want only have a number for 2014-16 if you include debt This line item would be very difficult to explain in the context of what you have learned in this class List assumptions here List assumptions here Balance Sheet: Cash Accounts receivable, net Inventory Total current assets Property, plant \& equipment Accumulated depreciation Fixed assets, net Other assets Total assets Notes payable, bank Accounts payable Miscellaneous accruals Total current liabilities Capital stock Retained earnings Total liabilities and owners' equity \begin{tabular}{|c|c|c|c|c|c|c|c|c|c|c|} \hline \multirow{2}{*}{\multicolumn{2}{|c|}{2010}} & & \multirow[b]{2}{*}{2011} & \multirow[b]{2}{*}{2012} & \multirow[b]{2}{*}{2013} & \multicolumn{5}{|c|}{ Pro-Forma } \\ \hline & & & & & & & 2014 & \multicolumn{2}{|l|}{2015} & \multirow{2}{*}{(745)2016} \\ \hline \multirow[t]{9}{*}{$} & 41 & $ & 35$ & 28 & 9 & s & \begin{tabular}{l} (292) \\ \end{tabular} & (499) & s & \\ \hline & 264 & & 228 & 364 & 425 & & 641 & 833 & & 1083 \\ \hline & 215 & & 285 & 461 & 568 & & 844 & 1097 & & 1427 \\ \hline & 520 & & 548 & 852 & 1,002 & & \begin{tabular}{l} 1,193 \\ \end{tabular} & 1,432 & & 1,765 \\ \hline & 56 & & 61 & 83 & 110 & $ & 142 & 185 & $ & 241 \\ \hline & - & & (6) & (12) & (20) & $ & (33) & (50) & $ & (72) \\ \hline & 56 & & 56 & 71 & 90 & & 109 & 135 & & 169 \\ \hline & 43 & & 65 & 97 & 130 & & 157 & 198 & & 254 \\ \hline & 620 & & 668 & 1,021 & 1,221 & & 1,459 & 1,765 & & 2,187 \\ \hline \multirow[t]{8}{*}{$} & 24 & & 38$ & 40 & 40 & & 0 & 0 & & 0 \\ \hline & 132 & & 81 & 357 & 482 & & 604 & 777 & & 1,010 \\ \hline & 24 & & 55 & 80 & 90 & & 93 & 93 & & 93 \\ \hline & 180 & & 174 & 477 & 612 & & 697 & 871 & & 1,104 \\ \hline & 375 & & 375 & 375 & 375 & & 375 & 375 & & 375 \\ \hline & 65 & & 119 & 168 & 234 & & 403 & 624 & & 911 \\ \hline & 620 & & 668 & 1,020 & 1,221 & & 1,476 & 1,870 & & 2,390 \\ \hline & & & ernal & ncin & needed: & s & - & $ & s & - \\ \hline \end{tabular} (2) \begin{tabular}{|c|c|c|c|} \hline \multirow{2}{*}{\multicolumn{2}{|c|}{ Total Assets }} & \\ \hline & & \multicolumn{2}{|l|}{2013} \\ \hline 0.8% & Statement of Cash Flows & \multicolumn{2}{|c|}{ Collection/Paybles/Inventory Turnover Period } \\ \hline 34.8% & (HINT: AVG DAYS RECEIVA & 21.54 & A/R divided by avg daily sales \\ \hline \multirow[t]{2}{*}{46.5%} & (HINT: AVG DAYS INVENTO & 35.46 & Inventory divided by avg daily COGS \\ \hline & & 29.57 & Paybles divided by daily Purchases \\ \hline \multicolumn{4}{|l|}{9.0%} \\ \hline \multicolumn{4}{|l|}{1.6%} \\ \hline \multicolumn{4}{|l|}{10.6%} \\ \hline 3.3% & Need to determine this amount for Steve & & \\ \hline 39.5% & & 16.3 & Daily Purchases \\ \hline \multicolumn{4}{|l|}{7.4%} \\ \hline \multicolumn{4}{|l|}{30.7%} \\ \hline 19.1% & & & \\ \hline \end{tabular} 3.9% List assumptions here Income statement Net sales Cost of goods sold Gross profit Operating, selling and administrative expense Interest income Interest expense Purchase discounts taken Profit before taxes Income taxes Profit after taxes (1) Dividends paid \begin{tabular}{|c|c|c|c|c|c|c|c|c|c|c|c|c|c|} \hline & \multirow[b]{2}{*}{2010} & & \multirow[b]{2}{*}{2011} & & \multirow[b]{2}{*}{2012} & \multirow[b]{2}{*}{2013} & \multicolumn{6}{|c|}{ Pro-Forma } & \multirow[b]{3}{*}{%/ SALES } \\ \hline & & & & & & & & 2014 & & 2015 & & 2016 & \\ \hline \multirow[t]{12}{*}{$} & 2,412 & $ & 3,597 & $ & 5,406$ & 7,197 & $ & 9,356 & $ & 12,163 & $ & 15,812 & \\ \hline & 1,936 & & 2,903 & & 4,393 & 5,844 & $ & 7,597 & $ & 9,876 & $ & 12,839 & %/ SALES \\ \hline & 476 & & 694 & & 1,013 & 1,353 & $ & 1,759 & $ & 2,287 & $ & 2,973 & %/ SALES \\ \hline & & & & & & & & & & & & & %/ SALES \\ \hline & 334 & & 501 & & 753 & 1,005 & $ & 1,307 & $ & 1,698 & $ & 2,208 & %/ SALES \\ \hline & 0 & & 1 & & 1 & 0 & $ & 0 & $ & 1 & $ & 1 & %/ SALES \\ \hline & 1 & & 2 & & 2 & 2 & $ & 2 & $ & 3 & $ & 4 & %/ SALES \\ \hline & 26 & & - & & 82 & 113 & $ & 147 & $ & 191 & $ & 248 & %/ SALES \\ \hline & 116 & & 192 & & 177 & 233 & & 303 & & 394 & & 513 & %/ SALES \\ \hline & 51 & & 85 & & 78 & 103 & & 133 & & 173 & & 226 & %/ SALES \\ \hline & 65 & & 108 & & 99 & 131 & & 170 & & 221 & & 287 & \\ \hline & - & & 54 & & 49 & 65 & & 17 & & 88 & & 100 & \\ \hline \end{tabular} \begin{tabular}{|l|rcr} & & \multicolumn{2}{c}{ (1) } \\ & & 2013 & 2014 \\ 2013 & & Avg Daily Sales/COGS/Payables \\ & Sales & 20 & 26 \\ 81.2% & COGS & 16 & 21 \\ 18.8% & Payables & 16.3 & 21.6 \end{tabular} 2015 2016 added to R/E Purchases List assumptions here * using beg-of-period equity 28.7% Net sales Cost of goods sold Gross profit Operating, selling and administrative expense Interest income Interest expense Purchase discounts taken Profit before taxes Income taxes Profit after taxes Dividends paid added to R/E Purchases List assumptions here \begin{tabular}{|c|c|c|c|c|c|c|c|c|c|c|c|c|c|c|} \hline \multirow{2}{*}{\multicolumn{15}{|c|}{\begin{tabular}{l} Purchases \\ List assumptions here \end{tabular}}} \\ \hline & & & & & & & & & & & & & & \\ \hline \multicolumn{2}{|l|}{ Actual growth rate: } & \multirow{2}{*}{\multicolumn{2}{|c|}{8.7%}} & \multicolumn{2}{|l|}{49.1%} & \multicolumn{2}{|l|}{50.3%} & \multicolumn{2}{|l|}{33.1%} & \multicolumn{2}{|l|}{30.0%} & \multicolumn{2}{|l|}{30.0%} & \multirow{2}{*}{\begin{tabular}{l} 30.0% \\ 18.7% \end{tabular}} \\ \hline \multicolumn{2}{|l|}{ sustainable growth rate: } & & & 12.2% & & 10.0% & & 12.0% & & 25.1% & & 17.0% & & \\ \hline \multicolumn{2}{|l|}{ retention ratio (R)} & 0.50 & & 0.50 & & 0.50 & & 0.50 & & 0.90 & & 0.60 & & 0.65 \\ \hline \multicolumn{2}{|l|}{ profit margin (P) } & 2.7% & & 3.0% & & 1.8% & & 1.8% & & 1.8% & & 1.8% & & 1.8% \\ \hline \multicolumn{2}{|l|}{ asset turnover (A) } & 3.89 & & 5.38 & & 5.30 & & 5.90 & & 6.41 & & 6.89 & & 7.23 \\ \hline \multicolumn{2}{|l|}{ leverage (T)} & 1.65 & & 1.52 & & 2.07 & & 2.25 & & 2.40 & & 2.27 & & 2.19 \\ \hline \multicolumn{15}{|l|}{ * using beg-of-period equity } \\ \hline \multicolumn{2}{|l|}{ SGR calculated as change in equity } & 17.3% & & 12.3% & & 10.0% & & 12.0% & & 27.9% & & 28.4% & & 28.7% \\ \hline \multicolumn{2}{|l|}{ SGR calculated as P R A T } & 8.7% & & 12.2% & & 10.0% & & 12.0% & & 25.1% & & 17.0% & & 18.7% \\ \hline \multicolumn{15}{|l|}{ Times interest earned } \\ \hline \multicolumn{2}{|l|}{ROE=NI/ Equity } & & & 21.81% & & 18.20% & & 21.47% & & 21.47% & & 21.82% & & 22.10% \\ \hline \multicolumn{2}{|l|}{ROE= DuPont way } & & & 21.81% & & 18.20% & & 21.47% & & 21.47% & & 21.82% & & 22.10% \\ \hline \multicolumn{2}{|l|}{ Use E.O.P. Equity } & & & 1.35 & & 1.88 & & 2.01 & & 2.01 & & 1.87 & & 1.77 \\ \hline \multicolumn{15}{|c|}{ Statement of cash flows: Year ending on December 31st } \\ \hline & & 2010 & & 2011 & & 2012 & & 2013 & & 2014 & & 2015 & & 2016 \\ \hline \multicolumn{15}{|l|}{ Operating activities: } \\ \hline Net Income & $ & 64.9 & $ & 107.7 & $ & 98.8 & $ & 130.6 & $ & 169.8 & $ & 220.8 & $ & 287.0 \\ \hline Depreciation & $ & - & $ & 5.6 & $ & 6.1 & $ & 8.3 & $ & 13.0 & $ & 16.9 & $ & 22.0 \\ \hline (Inc.) Dec. in A/R & $ & (264.3) & $ & 35.9 & $ & (135.6) & $ & (60.7) & $ & (216.1) & $ & (192.2) & $ & (249.9) \\ \hline (Inc.) Dec. in inventory & $ & (215.1) & $ & (69.6) & $ & (176.1) & $ & (106.9) & $ & (276.4) & $ & (253.2) & $ & (329.2) \\ \hline Inc. (Dec.) in A/P & $ & 131.8 & $ & (50.4) & $ & 275.9 & $ & 124.8 & $ & 121.9 & $ & 173.1 & $ & 233.1 \\ \hline Inc. (Dec.) in accr. Exp. Payable & $ & 24.0 & $ & 31.0 & $ & 25.0 & $ & 10.0 & $ & 3.5 & $ & - & $ & - \\ \hline Cash flow from (to) operations & $ & (258.7) & $ & 60.2 & $ & 94.1 & $ & 106.1 & $ & (184.3) & $ & (34.7) & $ & (36.9) \\ \hline Investing activiti & & & & & & & & & & & & & & \\ \hline Captial expenditures & $ & (56.3) & $ & (4.9) & $ & (21.4) & $ & (27.0) & $ & (32.9) & $ & (42.7) & $ & (55.6) \\ \hline Inc. in other LT assets & $ & (43.4) & $ & (21.3) & $ & (32.6) & $ & (32.2) & $ & (27.1) & $ & (41.8) & $ & (55.2) \\ \hline Cash flow from (to) investments & $ & (99.7) & $ & (26.2) & $ & (54.0) & $ & (59.2) & $ & (60.0) & $ & (84.5) & $ & (110.8) \\ \hline Financing activities: & & & & & & & & & & & & & & \\ \hline Inc. in notes payables & $ & 24.0 & $ & 14.0 & $ & 2.0 & $ & - & $ & (40.0) & $ & - & $ & - \\ \hline Dividends & $ & - & $ & (53.8) & $ & (49.4) & $ & (65.3) & $ & (17.0) & $ & (88.3) & $ & (100.5) \\ \hline Stock & $ & 375.0 & $ & - & $ & - & $ & - & $ & - & $ & 1.0 & $ & 2.0 \\ \hline Cash flow from (to) financing & $ & 399.0 & $ & (39.8) & $ & (47.4) & $ & (65.3) & $ & (57.0) & $ & (87.3) & $ & (98.5) \\ \hline Net cash inflow (outflow) & $ & 40.6 & $ & (5.9) & $ & (7.3) & $ & (18.4) & $ & (301.2) & $ & (206.5) & $ & (246.2) \\ \hline Reconciliation & & & & & & & & & & & & & & \\ \hline(+) Beginning cash balance & $ & - & $ & 40.5 & $ & 34.6 & $ & 27.4 & $ & 9.0 & $ & (292.2) & $ & (498.8) \\ \hline(=) Ending cash balance & $ & 40.5 & $ & 34.6 & $ & 27.4 & $ & 9.0 & $ & (292.2) & $ & (498.8) & $ & (744.9) \\ \hline \end{tabular} \begin{tabular}{rr} 2015 & 2016 \\ 33 & 43 \\ 27 & 35 \\ 27.8 & 36.1 \end{tabular} Page 1 Steve's Skis and Bikes, Inc. 1 Just back from a New Year's ski vacation at Whistler, Steve Mahre, president of Steve's Skis and Bikes, Inc. (SSB), became very concerned upon learning that the company's cash balance had fallen to just about $9.2 thousand dollars as of December 31.2013. Steve feared that this might not be adequate to support the company's current scale of operations. This was compounded by the fact that year-end cash balances had been declining now for three consecutive years, despite the company's impressive record of sales growth. The decline in cash was particularly worrisome to Steve because of difficulties he was currently experiencing with a number of the company's trade suppliers. These suppliers were pressing SSB for prompter payment of their invoices (implying a curtailment of the company's short term credit) which would severely limit prospects for continuing growth. A deeper fear was that some suppliers might cancel the company's exclusive distribution rights for their products. Moreover, with a low cash balance, it would be difficult for SSB to accelerate payments to suppliers. Purchase terms were typically 2/10, net 30 , and SSB had often been unable to take advantage of prompt-payment discounts. Steve's first step upon learning of the cash crisis was to call Mr. Carl Grizzly, vice-president of Evergreen Bank. Evergreen had served as SSB's bank of account since the company's founding, and had provided financing for several years in the form of renewable short-term notes. The interest rate on these notes was currently one and one-half percentage points above the bank's prime rate of 3.25%. These notes had been routinely renewed in the past, with only a cursory review by Mr. Grizzly of Steve's Skis' financial condition. Steve asked Mr. Grizzly to increase the bank's loan to $140,000 from its current level of $40,000, explaining that this would enable him to assuage some of his more strident suppliers, while providing a solid cash reserve for the company. Mr. Grizzly asked when the bank might expect SSB to repay the extra $100,000, and Steve replied that collection of accounts receivable should provide ample funds to reduce the loan to its customary level by the end of the year. Not being at that point entirely up-to-date regarding SSB's performance and financial condition, Mr. Grizzly promised to study the matter and to have an answer to the increased loan request within a few days. He mentioned that because credit conditions were tight, he would have to refer SSB's request to the bank's loan review committee. SSB is a distributor of a broad range of sporting goods, apparel, and camping equipment, located in Salt Lake City, Utah. Founded in 1998 by Steve Mahre, SSB was a successful enterprise almost from the start. A native of Yakima, Washington, Steve won the silver medal in slalom at the 1984 Winter Olympics in Sarajevo, finishing 21 hundredths of a second behind his more celebrated twin brother, Phil. He also won the gold medal in Giant Slalom at the 1982 World Championships in Schladming, Austria. Upon retiring from competitive skiing in March of 1984, Steve had accumulated 9 World Cup victories and 21 podiums. Over the next several years Steve started a successful ski training camp in Deer Valley, competed in auto racing, and (with his brother Phil) wrote a book. 2 In 2009, at the age of 52 and still eager for new challenges, Steve used almost all his savings plus a sizable contribution from his wife's parents to start SSB. With his ebullient Eric W. Wehrly prepared this case as the basis for classroom discussion rather than to illustrate either effective or ineffective handling of an administrative situation. 2 In 2006, at the age of 49, Phil Mahre decided it was time to come out of retirement and make another run at qualifying for the U.S. National Ski Team. personality, World Cup prestige, and wide range of sporting contacts, Steve quickly secured numerous customers, as well as distribution rights from several prominent manufacturers of winter sporting goods. Recognizing the seasonality of winter sporting goods, Steve included in his company's offerings year-round sporting goods and apparel. The business prospered almost immediately. Sales volume grew briskly, and net revenues had reached $7.2 million by fiscal year 2013. Steve's estimate for 2014 was $9.6 million, a target he was confident of reaching after securing exclusive Rocky Mountain distribution rights for a popular line of Austrian-made skis, boots, and apparel. Although the company had recorded positive quarterly net income almost every quarter since it started operations, the annual profit declined in 2012, and since then profit gains had slightly lagged sales growth. Over the years Steve's driving energy and natural selling ability won for him multiple awards in sales contests conducted by manufacturers. These awards usually consisted of trips to noted resorts and vacation areas, with all expenses paid. Steve customarily took advantage of these trips to exchange promotional ideas with distributors from across the country and all over the world. SSB's customers consisted of department stores, discount houses, ski shops, and general sporting-goods shops. Many of the latter were small and poorly financed. Hence, they tended to be slow in paying their bills. Keen competition from other distributors inhibited Steve from pressing too severely for collection from delinquent customers. Reflecting Steve's efforts to carry diversified product lines, sales were not markedly seasonal. Steve felt that this was an important advantage to the company, since it obviated the need to finance seasonal sales peaks. SSB's capital stock was entirely owned by Steve and his wife. Complete control of the enterprise was important to Steve and suited his competitive temperament. As a matter of policy, fifty percent of the company's profits had been paid out as dividends to the owners and had been invested regularly in local limited partnerships specializing in shopping mall and apartment investments. Although these investments had helped to diversify the holdings of the Mahres, their performance was not living up to expectations. Their current value appeared to be about one-half of their aggregate cost. Steve is active in community affairs, service clubs and charity drives. He has been described by his business acquaintances as "an All-American boy in the best sense of the term;" "a near-genius at selling who is determined to build a $50 million business;" and "an ideal combination of businessman and bon vivant." Steve's Skis \& Bikes, Inc. Balance Sheets as of December 31st Steve's Skis \& Bikes, Inc. Income Statements for fiscal years ending on December 31st (Thousands of dollars) Steve's Skis \& Bikes, Inc