Question - Use the following information for the forecasting related questions Q1~Q13
|
Year (Most recent in far right column.)
|
2009
|
2010
|
|
BALANCE SHEET DATA
|
|
|
|
Cash
|
4,200
|
4,500
|
|
Marketable Securities
|
9,000
|
10,000
|
|
Accounts Receivable
|
5,000
|
5,500
|
|
Inventories
|
1,900
|
2,100
|
|
CURRENT ASSETS
|
20,100
|
22,100
|
|
Long Term Investments
|
10,000
|
14,000
|
|
Property, Plant & Equipment - at cost
|
46,000
|
52,000
|
|
Accumulated Depreciation
|
-1,600
|
-4,820
|
|
TOTAL ASSETS
|
74,500
|
83,280
|
|
Accounts Payable
|
4,100
|
3,750
|
|
Short Term Debt
|
6,784
|
5,000
|
|
CURRENT LIABILITIES
|
10,884
|
8,750
|
|
Long Term Debt
|
24,200
|
21,000
|
|
TOTAL LIABILITIES
|
35,084
|
29,750
|
|
Common Stock + Paid in Capital
|
20,000
|
27,000
|
|
Retained Earnings
|
19,416
|
26,530
|
|
SHAREHOLDERS' EQUITY
|
39,416
|
53,530
|
|
TOTAL LIABILITIES AND EQUITIES
|
74,500
|
83,280
|
|
INCOME STATEMENT DATA
|
|
|
|
Revenues
|
91,000
|
110,000
|
|
Cost of Goods Sold
|
-40,950
|
-60,500
|
|
Gross Profit
|
50,050
|
49,500
|
|
Selling, General and Admin. Expense
|
-13,650
|
-22,000
|
|
Depreciation Expense
|
-3,100
|
-3,220
|
|
Operating Profit
|
28,966
|
24,280
|
|
Interest Income
|
390
|
760
|
|
Interest Expense
|
-3,200
|
-3,068
|
|
Income before Tax
|
26,156
|
21,972
|
|
Income Tax Expense
|
-6,539
|
-8,789
|
|
NET INCOME (computed)
|
19,617
|
13,183
|
Additional information -
There was no Marketable securities, PP&E, or investments sold.
Assume the common stock and paid in capital will stay same for the coming year
Use average numbers for the denominator for the calculation of turnover ratios
The forecasting techiques to be used are as follows:
- Sales is based on the past growth rate
- Turnover ratio-Cash, A/R, Inventories, A/P (Use purchase forecasted)
- Change/Sales-Marketable Securities, PP&E, Investment, Short-term and Long-term Debts
- Proportion to Sales-COGS, Gross Profit, SGA
- Depreciation expense is based on the Depreciation/beginning PP&E
- Interest Income or Interest Expense can be forecasted based on the interest rates form the beginning intrest bearing assets and liabilities
Required -
1. What is the interest rate for interest expense?
2. What is the forecasted interest bearing assets?
Marketable Securities:
Long-term Investments:
3. What is the forecasted interest bearing liabilities?
Short-term Debt:
Long-term Debt:
4. What is the forecasted Interest Income for year 2011?
5. What is the forecasted Interest Expense for year 2011?
6. What is the tax rate to be used for the forecasting 2011 tax expense?
7. What will be the cash flow from operations forecasted for 2011?