Prepare a long-term forecast for Fiscal Years 2017 and 2018.

Bettner, Chapter 5 Mini-Project

Directions: Based on the input variables below, prepare a long-term forecast for Fiscal Years 2017 and 2018. Percentage increases should be calculated against the preceding year's values. For example, the 2018 selling and administrative expenses should be estimated based on the values calculated for 2017. The purchase of inventory tracking software is an selling and administrative expenses.

PLEASE PROVIDE ANSWER ON EXCEL

Current Year Input Variables Percentage increase in net sales Cost of goods sold - % of net sales Year-2 Year-3 Projections Projections 10% 18% 60% 60% 60% Increase in selling and administrative expenses Increase in advertising Increase in impairment charges 28% 15% 1% 20% 18% 1% Income tax rate 45.0% 45.5% 46.0% Purchase new inventory tracking software 250 Depreciation and amortization 5,400 6,500 Interest income Interest expense 500 2,750 500 3,000 Sage Inc. Consolidated Statements of Earnings for the Years Ended December 31, 2016 (in Thousands) 2017 2018 $ Net sales Cost of goods sold Gross profit Selling and administrative expenses Advertising Depreciation and amortization Impairment charges Operating profit Other income (expense) Interest income Interest expense Earnings before income taxes Provision for income taxes Net earnings 2016 215,600 129,364 86,236 45,722 14,258 3,998 3,015 19,243 422 (2,585) 17,080 7,686 9,394 $