What are considered to be conservative, sales are expected to increase 15 percent next year (2016) even though the new product will come on line in mid-year. An additional 20 percent increase in sales is expected the following year (2017), 10 percent in (2018), 5 percent in (2019), before leveling off to a projected future annual growth rate of 3 percent beginning with (2020).

______________________________

AMGEN CORPORATION

Income Statement for December 31, 2015

(Thousands of Dollars)

__________________________________

Sales $15,000

Operating expenses -12,000

EBIT 3,000

Interest 320

EBT 2,680

Taxes (40%) 1,072

Net income 1,608

Cash dividends (40%) 643

Added retained earnings $965

AMGEN CORPORATION

Balance Sheet as of December 31, 2015

(Thousands of Dollars) ________________________________________________________________________

Cash & marketable securities $ 1,000 Accounts payable $ 1,600

Accounts receivable 2,000 Bank Loan 1,800

Inventories 2,200 Accrued liabilities 1,200

Total current assets 5,200 Total current liabilities 4,600

Long-term debt 2,200

Fixed assets, net 6,800 Common stock 2,400

Total assets $12,000 Retained earnings 2,800

Total liabilities & equity $12,000 ________________________________________________________________________

c .Prepare pro forma income and balance sheet statements for 2016 before obtaining any additional financing.

d .Prepare a second iteration of your pro forma financial statements for 2016 if the initial AFN estimate is to be financed by additional long-term funds at an 8 percent interest rate.

e .Prepare pro forma financial statements for 2017 that build on to the pro forma results obtained in Part d.