Question
Pro forma. You are a financial analyst that has been hired to forecast the possible funding need for a company based on its financial information
Pro forma. You are a financial analyst that has been hired to forecast the possible funding need for a company based on its financial information and future plans.
You know that the net property, plant, and equipment at the end of 2018 was $25,000K and it currently equals $30,000K. Long-term debt at the end of 2018 was $15,000K and it currently equals $17,000K.
You assumed that sales will decreased by 10 percent. Given the companys recent income statement, you constructed the pro forma below:
Net Income Statement, Fiscal Year End 2019 (in thousands of $) | Proforma | Ratio | assumptions | ||
Sales | 30000 | 27000 | (30000 x0.9) | PPE 2018 = 25,000 | |
Cost of Goods Sold | 20000 | 18000 |
| PPE 2019 = 30,000 | |
Depreciation | 3000 | 3600 |
| LT DEBT 2018 = 15,000 | |
EBIT | 7000 | 5400 | LT DEBT 2019 = 17,000 | ||
Interest Expense | 1200 | 1360 |
| ||
Pre-Tax Income | 5800 | 4040 | |||
Tax | 870 | 606 |
| ||
Net Income | 4930 | 3434 |
Report the ratios for the Cost of Goods Sold, Depreciation, Interest Expense, and Tax that you used to construct the pro-forma net income statement for fiscal year end 2020.
Report your answers as follows. Report each ratio as 0.XX. For example, a ratio of 30/90 would be reported 0.33 and a ratio of 100/500 would be reported as 0.20 .
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