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Provide projected Income Statement, Retained Earnings statement and Projected Balance Sheet on the right using the following assumptions: 1 sales growth is 110%; sales return,
| Provide projected Income Statement, Retained Earnings statement and Projected Balance Sheet on the right | |||||||||
| using the following assumptions: | |||||||||
| 1 | sales growth is 110%; sales return, as a percentage of sales revenue, does not change | ||||||||
| 2 | Gross profit margin is the same as 2014 profit margin | ||||||||
| 3 | Depreciation expense/Prior PPE (gross) = 4% | ||||||||
| 4 | Interest expense/Prior year long-term debt = 6% | ||||||||
| 5 | All other expenses (insurance, supplies, utilities, bad debt and rent) grow at the same rate as sales growth. | ||||||||
| 6 | Income tax expense/ pre-tax income = 12% | ||||||||
| 7 | A/R turnover is the same as that calculated for year 2014 | ||||||||
| 8 | A/P turnover is the same as that calculated for year 2014 | ||||||||
| 9 | Inventory turnover is the same as that calculated for year 2014 | ||||||||
| 10 | There is no change in current assets other than Cash, A/R and inventory | ||||||||
| 11 | Capital expenditure/Sales =7% | ||||||||
| 12 | Assume no change in long-term assets except for PP&E. | ||||||||
| 13 | Assume no change in all liabilities, excpet for A/P | ||||||||
| 14 | Assume no change in shareholders' Equity except for Retained Earnings | ||||||||
| 15 | No dividend is paid on common stock and 5% dividend is paid on preferred stock | ||||||||
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