This is my assignment:

Decideupon an initiative you want to implement that would increase sales over the next five years, (for example, market another product, corporate expansion, and so on).

Usingthe sample financial statements, create pro forma statements of fiveyear projectionsthat are clear, concise, and easy to read. Be sure to double check the calculations in your pro forma statements.Make assumptions that support each line item increase or decrease for your forecasted statements.

Discussand interpret the financials in relation to the initiative. Make recommendations on potential discretionary financing needs.

Writea 350 - 700 word analysis of the company's short term and long term financing needs and determine strategies for the company to manage working capital.

I am completely lost. I honestly have no idea where I should even start. I have re-read the chapter about a million times and it still does not make any sense to me. Attached are the sample financial statements that I need to use. If you could give me a starting point or some guidance it would be greatly appreciated.

XYZ Company, INC. Balance Sheet For Year Ending December 31, 20XX ASSETS Current Assets Cash 10,525 Accounts Receivable 27,000 Inventory 30,000 2,000 Prepaid Expenses Total Current Assets 69,525 Fixed Assets 215,000 Propertynet of depreciation 80,000 Equipmentnet of depreciation 5,000 Vehiclesnet of depreciation Total Fixed Assets 300,000 Total Assets 369,525 LIABILITIES Current Liabilities 20,000 Revolving lines of credit 5,000 Accounts Payable Current Portion of Long-term Debt Total Current Liabilities 15,000 40,000 Long-term Liabilities Long-term debt and capital leases 45,500 Loans payable to stockholders 60,500 Total Long-term Liabilities 106,000 Total Liabilities 146,000 Stockholders Equity 1,000 Common stock Additional Paid-in Capital 25,000 Retained Earnings (Cum from prior years) 53,190 Retained Earnings (From current P&L) 144,335 Total Stockholders Equity 223,525 Total Liabilities and Stockholders Equity 369,525 XYZ Company, INC. Profit and Loss Statement Year Ended December 31, 20XX % Sales Returns and allowances Net Sales 1,750,450 2,752 1,747,698 100.0 Cost of Sales Beginning Inventory Purchases Production Labor Ending Inventory Total Cost of Sales 50,000 610,162 420,108 30,000 1,050,270 60.1 Gross Profit 697,428 39.9 Selling Expense Wages Commissions Marketing Total Selling Expenses 75,000 25,000 25,000 125,000 7.2 Operating Expense Salaries Payroll taxes Benefits Office Supplies Postage Professional Fees Telephone Utilities Training & Education Miscellaneous Total Operating Expense 225,000 29,000 27,000 500 250 2,000 850 950 250 50 285,850 16.4 Operating ProfitEBITDA 286,578 16.4 Other Income (Expense) Interest Depreciation Amortization Total Other Income (Expense) (9,650) (12,000) (2,500) (24,150) Total Pre-tax Profit Income Tax Allowance 262,428 15.0 118,093 Net Profit 144,335 8.3