Project 2023 - 2025 Income Statement and Balance Sheet. Assumptions: - Sales growth rates in each of next 3 years: 15%,35%,45% - Operating expenses as \% percentage of sales stays at 2022 level for 2023 then goes down by 1% in each of next two years (so, if was 20% in 2022 , forecast levels would be .20,.19,.18 ) - Cost of goods sold as \% of sales stays at 2022 level for 2023 and then improves by .05 in 2024 and by another .03 in 2025 (remember, this is an expense, so improves means it goes down) - 40% tax rate - No dividends or new stock issued - Interest expense fixed at $400/ year - Bank loan and LT debt stay constant - 2023 A/R days = year 2022 days, then decrease by 3 days in 2024 \& another 3 days in 2025 - 2023 Inventory days = year 2022 days then decrease by 3 days in 2024 \& another 3 days 2025 - A/P days stays at year 2022 days - Net fixed assets and accruals: Use 2022% of sales for 2023-2025 - Required cash fixed at 1000 - Calculate Additional Funds Needed as plug (to get Balance Sheet to balance!) Calculate 2023 breakeven revenues and units. Assumptions: i) \begin{tabular}{l|r|} \hline Balance Sheet \\ \hline Required Cash & 1000 \\ \hline A/R & 2000 \\ \hline Inventories & 2200 \\ \hline Total Current Assets & 5200 \\ \hline Net Fixed Assets & 6800 \\ \hline Total Assets & 12000 \\ \hline \\ \hline Accounts Payable & \\ \hline Bank Loan & 1600 \\ \hline Accured Liability & 1800 \\ \hline Total Current Liability & 1200 \\ \hline Long Term Debt & 4600 \\ \hline Common Stock & 2200 \\ \hline Retained Earnings & 2400 \\ \hline Additional Funds Needed (AFN) & 2800 \\ \hline Total Liability \& Equity & 0 \\ \hline \end{tabular} BREAKEVEN CALCULATION Fixed Costs Gross margin \% BREAKEVEN REVENUES Price per unit BREAKEVEN UNITS