Please use the percentage of sales method and the ratio method (where appropriate) to forecast 2018E financial statements using the 2017 data. Use formulas to do all calculations of the forecast estimates and use the iteration formula to determine the interest expense and amount of debt at the same time. All assumptions should be included. At the beginning of 2017, Student Copy anticipated a substantial increase in sales. Despite good sales the company experienced a shortage of cash and found it needed to increase its short term borrowing to at least $500.000, To do this it had to change banks as its current line of credit was $300,000. The new line of credit required that it pay off all of its notes payables also and to maintain is accounts payables at 10 days outstanding. This way it would be able to take all of its purchase discounts which are 2/10 net 30. There will be additions to property, plant and equipment as there is a need for capacity to increase to support this increase in sales. In addition, the company is trying to keep its days sales outstanding (DSO) ratio at 30 days. Sales are predicted to increase from $4,519,000 to $5,000,000. Use the percentage of sales method and ratio method to develop a pro forma balance sheet and an income statements for 2018 to determine the amount of BANK DEBT required to support this sales increase. sales per dag. 10 dan - Purchase deciond cost of Missing 30 day to day: 2o day Disount = 36 = 2 Miss descon! 2017 2018E Assumptions Income Statement Student Copy (in thousands) $4,519 $5,000 432 Sales Cost of Goods Sold Beg Inventory Purchases Ending Inventory Total COGS 3,579 587 $3,4243 1,095 940 $ 155 Gross Profit Operating Expenses EBIT Interest Expense EBT Taxes NI 56 $ 99 s 77 *Use 25% as the tax rate, and 5% as the interest rate Balance Sheet of Student Copy 2017 2018E Cash A/R Inventory PPE $ 56 606 587 288 Total Assets $1537 Bank Debt $ 300 PLUG *** Notes Payable trade A/P 10 day Accrued Expenses LTD Current Portion Purchases APC LTD 100 SE Equity 449 IL & SE Equity $1537 SE Equity & Ni 2.11 Dividend Please show me the formulas that you used Please use the percentage of sales method and the ratio method (where appropriate) to forecast 2018E financial statements using the 2017 data. Use formulas to do all calculations of the forecast estimates and use the iteration formula to determine the interest expense and amount of debt at the same time. All assumptions should be included. At the beginning of 2017, Student Copy anticipated a substantial increase in sales. Despite good sales the company experienced a shortage of cash and found it needed to increase its short term borrowing to at least $500.000, To do this it had to change banks as its current line of credit was $300,000. The new line of credit required that it pay off all of its notes payables also and to maintain is accounts payables at 10 days outstanding. This way it would be able to take all of its purchase discounts which are 2/10 net 30. There will be additions to property, plant and equipment as there is a need for capacity to increase to support this increase in sales. In addition, the company is trying to keep its days sales outstanding (DSO) ratio at 30 days. Sales are predicted to increase from $4,519,000 to $5,000,000. Use the percentage of sales method and ratio method to develop a pro forma balance sheet and an income statements for 2018 to determine the amount of BANK DEBT required to support this sales increase. sales per dag. 10 dan - Purchase deciond cost of Missing 30 day to day: 2o day Disount = 36 = 2 Miss descon! 2017 2018E Assumptions Income Statement Student Copy (in thousands) $4,519 $5,000 432 Sales Cost of Goods Sold Beg Inventory Purchases Ending Inventory Total COGS 3,579 587 $3,4243 1,095 940 $ 155 Gross Profit Operating Expenses EBIT Interest Expense EBT Taxes NI 56 $ 99 s 77 *Use 25% as the tax rate, and 5% as the interest rate Balance Sheet of Student Copy 2017 2018E Cash A/R Inventory PPE $ 56 606 587 288 Total Assets $1537 Bank Debt $ 300 PLUG *** Notes Payable trade A/P 10 day Accrued Expenses LTD Current Portion Purchases APC LTD 100 SE Equity 449 IL & SE Equity $1537 SE Equity & Ni 2.11 Dividend Please show me the formulas that you used
