Project #24697 - Finance

Forecasting Pro Forma Financial Statements- Prepare a pro forma income statement and balance sheet for webb enterprises found in problem 6-7 where revenues are expected to grow by 20% in 2011 Make the following assumptions in making your forecast of the firms balance sheet:

The income statement expenses are a constant percent of revenues expect for interest which remains equal in dollar amount to the 2010 level and taxes which equal to 40% of earnings before taxes.

The cash and marketable securities balance remains equal to $500 and the remaining current asset accounts and fixed assets increase in proportion to revenues for 2010

Net property plant and equipment increase in proportion to the increase in revenues

Accounts payable increase in proportion to firms revenues

Owners equity increase by the amount of firms net income for 2011 (no cash dividends are paid)

Long term debt remains unchanged and short term debt changes in an amount that balances the balance sheet

6-13 using your pro forma financial statements from problem 6-12 estimate the firms FCF for 2011

  

Balance Sheet

2010

Cash and Marketable Securities

$500

Account Receivable

$6000

Inventories

9500

Current Assets

16,000

Net Property plant and equipment

17000

Total

33000

Account Payable

7200

Short term debt

6800

Current liabilities

14000

Long term debt

7000

Total Liabilities

21000

Total owners equity

12000

Total liabilities and owners equity

33000

 

 

 

 

 

 

 

Income Statement

2010

Revenues

30000

Cost of goods sold

(20000)

Gross profit

10000

Operating expense

8000

Net operating income

2000

Earnings before taxes

1100

Taxes

(400)

Net Income

700

 

 

Subject Business
Due By (Pacific Time) 03/09/2014 08:00 pm
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