Here is the assumptions and data;
a. Sales Revenue Year 1: $10,000,000 Annual Growth Rate There after: 4.5%
b. Cost of Goods Sold: $5,000,000 Important Note: NO CHANGE in the cost of goods sold amount for years 2 and 3; it remains the same.
c. Operating Expenses:
For year 1: Advertising: $500,000 Payroll: $2,500,000 Utilities: $150,000 Services: $150,000. Assume an annual growth rate of 3% for all of these operating expenses after year 1.
d. Other expense: Do not inculde the following expenses in opearting expense, but include them after calculating operating incoming.
Deprecation: the base is $3,000,000, deprecation is over 5 years and is taken on a straight line basis,
Interest Expense: $250,000;
Taxes: $250,000
Important Note: There is NO CHANGE in the amounts of deprecatioin, Interest and Taxes from Year 1.
e. Shares and stock price data:
10 Million shares of common stock outstanding
stock price per share: Year 1: $6; Year 2: $7; Year 3: $10
questions:
Year 1 Gross Margin:_______
Year 1 Operating Income:______
Year 1 Deprecation Expense: _________
Year 1 Net Income:_______
Year 2 Sales Revenue:______
Year 2 Operating Income:______
Year 2 Net Income:______
Year 2 Operating Income:________
Year 3 Net Income:______
EPS for Year 1:________
EPS for Year 2:________
EPS for Year 3:________
EP for Year 1:________
EP for Year 2:________
EP for Year 3:________