Problem I (20 points): Given the assumptions from 2013 to 2015, please assume that the financial ratios in 2016 is the average of those of the first three years, answer the following questions. (Note: Try to give formulas you use or the calculating procedure to justify your answers.)

1. Using the method we learned in class, fill the following assumption form as well as Pro Forma financial statements of firm WNS for 2016 . (15 points)

2. Compute the CFFA for firm WNS in 2016. (5 points)

Projection Assumptions (K) 2013 2014 2015 2016 Sales 100.00% 100.00% 100.00% 100.00% Cost of goods sold ratio 75.2% 75% 75.8% Operating expenses ratio 21.30% 20.60% 20.30% Tax Rate 0.35 0.35 0.35 10 10 10 Deprecation Interest (to be paid 5 5 5 Cash/Sales 1% 1% 1% Days' sales in receivables 43.4 43.4 43.4 Days' sales in inventory 59.4 59.4 59.4 Net Fixed Asset Turnover 12.5 12.5 12.5 10 10 10 Days to pay payables Other current liabilities/Sales 1.50% 1.50% 1.50% Ending inventory N/a N/a 587 Net Fixed Asset N/a N/a 410 Net working capital N/a N/a 1100 Pro Forma Income Statement, WNS 2016 Sales 5500 Cost of Goods Sold Gross Profit Operating Expense Depreciation EBIT Interest EBT Tax Net Income Part of Pro Forma Balance Sheet, WNS 2016 Cash Accounts Receivable Inventory Current Assets Net Fixed Assets Accounts Payable Other current liabilities Current Liability Projection Assumptions (K) 2013 2014 2015 2016 Sales 100.00% 100.00% 100.00% 100.00% Cost of goods sold ratio 75.2% 75% 75.8% Operating expenses ratio 21.30% 20.60% 20.30% Tax Rate 0.35 0.35 0.35 10 10 10 Deprecation Interest (to be paid 5 5 5 Cash/Sales 1% 1% 1% Days' sales in receivables 43.4 43.4 43.4 Days' sales in inventory 59.4 59.4 59.4 Net Fixed Asset Turnover 12.5 12.5 12.5 10 10 10 Days to pay payables Other current liabilities/Sales 1.50% 1.50% 1.50% Ending inventory N/a N/a 587 Net Fixed Asset N/a N/a 410 Net working capital N/a N/a 1100 Pro Forma Income Statement, WNS 2016 Sales 5500 Cost of Goods Sold Gross Profit Operating Expense Depreciation EBIT Interest EBT Tax Net Income Part of Pro Forma Balance Sheet, WNS 2016 Cash Accounts Receivable Inventory Current Assets Net Fixed Assets Accounts Payable Other current liabilities Current Liability