Question
The management of Coker Corp. is doing a quick forecast of 20X9 using the modified percentage of sales method in preparation for a more detailed
The management of Coker Corp. is doing a quick forecast of 20X9 using the modified percentage of sales method in preparation for a more detailed planning exercise later in the month. The estimate is to assume a 11% growth in sales. All other line items are to be assumed to grow at the same rate except for fixed assets which is projected to increase by $95,000 due to an expansion program already underway. Approximate financial statements for the current year, 20X8, and a planning worksheet are shown below. The firm pays 10% interest on all of its debt. Assume the tax rate is a flat 25%. There are no plans for dividends or the sale of additional stock next year. Make a forecast of Coker's complete income statement and balance sheet. Enter your answers in thousands. For example, an answer of $12 thousands should be entered as 12, not 12,000. (Hints: The easiest way to grow a number by 11% is to multiply it by 1.11 rather than taking 11% and adding. Do not grow subtotals. For example, to grow revenue and COGS by 11%, round each to the nearest thousand and subtract for gross margin. Don't grow interest, debt, or equity; use the debt/interest iteration technique.) Round your answers to the nearest whole thousand. Enter all amounts as a positive numbers.
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