The Firm is WALMART
Homework consists of preparation of proforma income statement of a company you choose. It also covers a variance report and introductory CVP analysis. OBTAIN MY APPROVAL OF COMPANY BEFORE STARTING. Your analysis must be based either on annual data for at least 10 years or on quarterly data for at least 5 years, 2018 being the last year of analysis (that is 2009-2018 for annual, 2014-2018 for quarterly statements). First by using statistical analysis, you must determine sales trend function in time. (Take X as year, Y as Sales and find the equation Y=aX+b for linear or, if required, Y=aX+bx+c for curvilinear sales function. You can either use the year numbers for X's directly as 2009, 2010, 2011, etc. or assign numbers 1 through 10 to each year 1 representing 2009, 2 representing 2010, etc.) Now, use regression analysis to determine functional relationship between sales and expenses. Take R&D, Marketing, G&A, and Financial expenses separately. Afterward, use sales trend function to determine forecast sales of 2019. Determine forecast cost of sales of the same year by using average gross profit margin of all years. Then use individual expense functions to estimate 2019 values for each expense (R&D, Mktg, G&A, Fin.). Prepare a proforma income statement for 2019 based on your findings in the paragraph above. Now take actual income statement of the company for 2019 and compare your proforma statement with this actual statement item by item to calculate variances (deviations from your estimates). Limit your comparisons to the items on proforma statement. Ignore other items on the actual statement. This will be your variance report which will be the basis for budgetary control. Finally draw a PN chart (profit graph) and indicate breakeven point, forecast sales, forecast profit, and forecast safety margin (all for 2019) on it. Homework consists of preparation of proforma income statement of a company you choose. It also covers a variance report and introductory CVP analysis. OBTAIN MY APPROVAL OF COMPANY BEFORE STARTING. Your analysis must be based either on annual data for at least 10 years or on quarterly data for at least 5 years, 2018 being the last year of analysis (that is 2009-2018 for annual, 2014-2018 for quarterly statements). First by using statistical analysis, you must determine sales trend function in time. (Take X as year, Y as Sales and find the equation Y=aX+b for linear or, if required, Y=aX+bx+c for curvilinear sales function. You can either use the year numbers for X's directly as 2009, 2010, 2011, etc. or assign numbers 1 through 10 to each year 1 representing 2009, 2 representing 2010, etc.) Now, use regression analysis to determine functional relationship between sales and expenses. Take R&D, Marketing, G&A, and Financial expenses separately. Afterward, use sales trend function to determine forecast sales of 2019. Determine forecast cost of sales of the same year by using average gross profit margin of all years. Then use individual expense functions to estimate 2019 values for each expense (R&D, Mktg, G&A, Fin.). Prepare a proforma income statement for 2019 based on your findings in the paragraph above. Now take actual income statement of the company for 2019 and compare your proforma statement with this actual statement item by item to calculate variances (deviations from your estimates). Limit your comparisons to the items on proforma statement. Ignore other items on the actual statement. This will be your variance report which will be the basis for budgetary control. Finally draw a PN chart (profit graph) and indicate breakeven point, forecast sales, forecast profit, and forecast safety margin (all for 2019) on it
