Answered step by step
Verified Expert Solution
Question
...
1 Approved Answer
Selected assumptions for 2018 Sales growth rate 9 % Cost of goods sold/Sales 62 % Dividends/Net income 40 % Income Statement Balance Sheet Actual Forecast
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. Which of the following formulas would correctly give the forecast for sales in cell C8?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-text-image.webp)
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Step: 3
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started