Question
Review General Motors annual report for 2018. As you complete this assignment, assume that GM is projecting a 10% increase in sales revenue next year.
Review General Motors annual report for 2018. As you complete this assignment, assume that GM is projecting a 10% increase in sales revenue next year. Assume all expenses except interest and taxes will increase in a linear manner (i.e., all expenses except interest and taxes will increase by 10%), and all assets will increase in a linear manner.
Step 1. Prepare a report that includes an analysis for whether or not GM will need additional funding to acquire the additional long-term assets necessary to support the increased sales. The following calculations will need to be completed in order to prepare this report:
Prepare a pro forma income statement, balance sheet, and cash flow statement.
Perform a ratio analysis of the pro forma statements.
Step 2. Recommend whether GM should undertake the expansion. Justify your recommendation.
Review General Motors annual report for 2018. As you complete this assignment, assume that GM is projecting a 10% increase in sales revenue next year. Assume all expenses except interest and taxes will increase in a linear manner (i.e., all expenses except interest and taxes will increase by 10%), and all assets will increase in a linear manner.
Step 1. Prepare a report that includes an analysis for whether or not GM will need additional funding to acquire the additional long-term assets necessary to support the increased sales. The following calculations will need to be completed in order to prepare this report:
Prepare a pro forma income statement, balance sheet, and cash flow statement.
Perform a ratio analysis of the pro forma statements.
Step 2. Recommend whether GM should undertake the expansion. Justify your recommendation.
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