Pro Forma Balance Sheet:
You are the head of the Huffman Trucking accounting department. The chief executive officer (CEO) has asked you to prepare a financial report addressing long-term financial needs.
You only need to calculate a 1 year pro forma and then determine EFN for that year.
Examine financial information for Huffman Trucking, within the Virtual Organization web link located on the course materials page. Read the New Strategic Directions Memo. Calculate external funds needed (EFN) to create the pro forma balance sheet. Calculate the following year-end ratios for the pro forma statements:
Profit as a percentage of sales
Current ratio
Asset ratio
Prepare a 700- to 1,050-word financial report for the CEO containing the EFN calculation, the ratio calculations, and an explanation of how you reached the calculations. Explain which income statement and balance sheet items you assumed were variable instead of fixed.
“Huffman Trucking
Income Statement
(Unaudited)
(In Thousands)”
2011 2010 2009 2008 2007 2006 2005 2004 2003 2002
Revenue $1,109,295 $969,240 $842,817 $1,021,348 $932,653 $879,944 $807,288 $685,432 $603,852 $555,778
Operating Expenses
Salaries, Wages & Benefits $406,191 $367,993 $328,624 $387,391 $374,291 $353,739 $330,597 $293,212 $266,556 $251,468
Fuel Expense $318,737 $258,904 $206,052 $349,952 $256,488 $217,363 $192,357 $139,389 $111,067 $104,780
Operating Supplies and Expenses $117,670 $105,875 $144,387 $146,414 $136,468 $152,318 $136,319 $121,442 $107,471 $95,956
Purchased Transportation $138,140 $114,250 $95,209 $103,901 $94,455 $89,957 $82,529 $75,026 $64,400 $54,392
Operating Taxes & Licenses $19,033 $17,753 $17,665 $18,993 $19,088 $18,613 $17,989 $16,170 $14,700 $14,272
Insurance & Claims $11,995 $12,493 $11,676 $13,918 $14,202 $13,526 $13,006 $11,587 $10,534 $9,405
Provision for Depreciation $3,009 $2,773 $2,618 $2,899 $2,803 $2,726 $2,738 $2,663 $2,590 $2,598
Total Operating Expenses $1,014,775 $880,041 $806,231 $1,023,468 $897,795 $848,242 $775,535 $659,489 $577,318 $532,871
Operating Income from Continuing Operations $94,520 $89,199 $36,586 ($2,120) $34,858 $31,702 $31,753 $25,943 $26,534 $22,907
Interest Expense $466 $768 $1,044 $1,018 $988 $790 $901 $1,036 $1,147 $1,111
Tax Expense $34,887 $32,923 $13,504 ($782) $12,866 $11,701 $12,050 $10,917 $10,879 $9,163
Net Income $59,167 $55,508 $22,038 ($2,356) $21,004 $19,211 $18,802 $13,990 $14,508 $12,633