Selected assumptions for 2018
Sales growth rate	9	%
Cost of goods sold/Sales	62	%
Dividends/Net income	40	%

Income Statement									Balance Sheet
	Actual				Forecast					Actual				Forecast
	2017				2018					2017				2018
Sales	$	1,000							Cash	$	100
Cost of goods sold		600							Accounts receivable		200
Operating expense		200							Inventory		500
Depreciation expense		100							Total Current Assets		800
EBIT		100							Net PP&E		1,000
Interest expense		35							Total Assets		1,800
Pre-tax income		65							Accounts payable		300
Tax		26							Bank loan		100
Net Income	$	39							Total Current Liabilities		400
									Long-Term Debt		400
									Shareholders' Equity		1,000
									Total Liabilities & Equity	$	1,800

Please refer to the spreadsheet above. Selected assumptions are given for preparing pro forma financial statements for 2018. When the pro formas are completed, which of the following formulas would correctly give the forecast for cost of goods sold in cell C9?

Multiple Choice

• = B8 B3

• = B9 B3

• = B9 B2

• = B9 + B9 B3

• None of the options are correct.