Compute year-to-year percentage annual growth in total sales

Assignment Help Corporate Finance
Reference no: EM131300913

Financial Management Paper

The selected financial statements for Micro Chip Computer Corporation. Answer questions 1 and 2 below based on the financial data.

Micro Chip Computer Corporation Selected Financial Data

Fiscal Years (in millions except share and per share amounts)

2008

2007

2006

2005

2004

Net Sales

$ 8,334

$ 6.141

$ 9.181

$ 11,933

$ 11,062

Net Income (loss)

$ 811

$ 519

$ (1.245)

$ (995)

$ 424

Earnings (loss) per common share:

 

 

 

 

 

Basic

$ 5.65

$ 3 84

$ (9.15)

$ (9.15)

$ 3.50

Diluted

$ 4.64

$ 3.07

$ (9.15)

$ (6.89)

$ 3.45

Cash Dividends declared per common share

$ --

$ --

$ --

$ 0.12

$ 0.48

Shares used in computing earnings (loss) per share (in thousands):

 

 

 

 

 

Basic

143,500

135,000

13,000

144,500

121,192

Diluted

174,900

169,000

136,000

144,500

123,047

Cash, cash equivalents, and short-term investments

$ 5,426

$ 4,600

$ 3.859

$ 3,945

$ 952

Total Assets

$ 6,161

$ 5,289

$ 5,233

$ 6,364

$ 6,231

Long-term Debt

$ 300

$ 954

$ 951

$ 949

$ 303

Shareholders' Equity

$ 3,104

$ 1,642

$ 1,200

$ 2,058

$ 2,901

1. Determine the year-to-year percentage annual growth in total net sales.

2. Based only on your answers to question #1, do you think the company achieved its sales goal of +10% annual revenue growth in 2009? Determine the target revenue figure, and explain why you do or do not feel that the company hit its target.

Next, consider Micro Chip's Consolidated Statement of Operations for the year ended September 25, 2008. Answer questions 1 and 2.

Micro Chip Computer Corporation

Consolidated Statements of Operations For the period September 26, 2007 through September 25, 2008.

Sales

$8,334.00

Cost of Sales

$5,458.00

Gross Margin

$2,876.00

Operating expenses:

R & D

$525.00

Selling, General, and Administrative

$691.00

In-process R & D

---------

Restructuring costs

---------

Total Operating Exp

$1,216.00

Operating income

$1,660.00

Total interest and other Income net

$194.00

Income before provision for Income taxes

$1,854.00

Provision for income Taxes (15%)

$278.10

Net income

$1,575.90

 

1. Use the Percentage Sales Method and a 25% increase in sales to forecast Micro Chip's Consolidated Statement of Operations for the period of September 26, 2008 through September 25, 2009. Assume a 15% tax rate and restructuring costs of 5% of the new sales figure.

2. Discuss your results from question number #1. What assumptions have you made? Do any of your assumptions seem unreasonable?

To receive full credit on this assignment, please show all work, including formulae and calculations used to arrive at the financial values. Students using Microsoft Excel must provide an adequate explanation of the methodology used to arrive at that answer.

Assignment Guidelines

• Download the financial statements and consolidated statement of operations by clicking on the links above in the assignment description.

• Analyze the statements and then answer the four questions listed in the assignment description.

• Show all work including calculations and formulas. If applicable, provide a detailed explanation of how you used Microsoft Excel to arrive at your answers.

• Organize your answers, mathematical calculations, and Microsoft Excel data into a Word document of 1-2 pages.

Your submitted assignment must include the following:

• A double-spaced Word document of 1-2 pages that contains your answers to the four questions listed in the assignment description, any calculations you performed, and all formulae that were used. Also, provide your Excel data table(s) along with an explanation of how you arrived at your answers if applicable.

Reference no: EM131300913

What does it cost to have people analyze the data

What does it cost to have people analyze the data and produce reports? Other than an analyst, who within a healthcare organization needs to analyze the data and for what purpo

What are the firms major strengths and weaknesses

Use the extended DuPont equation to provide a summary and overview of company's financial condition as projected for 2014. What are the firm's major strengths and weaknesses

Calculate the variance for portfolio

Calculate the variance for each portfolio and then copy it down. This formula should have six values in it: 1 for Stock and what is the smallest standard deviation that you mu

Mix of long-term and short-term borrowing

What are the main factors that should be taken into consideration when deciding on the mix of long-term and short-term borrowing necessary to finance the expansion?

What is jower cost of capital?

The target capital for Jower Manufacturing is 52% COMMON STOCK, 14% PREFERRED STOCK, AND 34% DEBT. iF THE COST of common equity for the firm os 20.6% the cost of preferred sto

Prepare the entry to record issuance of the bonds

Prepare the entry to record issuance of the bonds at par under U.S. GAAP and repeat the requirement for part (a), assuming application of iGAAP to the bond issuance.

Analyze what is the projects expected rate of return

What is the incremental profit? To get a rough idea of the project's profitability, what is the project's expected rate of return for the next year (defined as the increment

Compute the profit or loss hephaestus recognises on contract

Compute the profit or loss Hephaestus recognises on the contract each year in x4, x5 and x6 under: the percentage-of-completion (POC) method (assume 'costs incurred' approxima

Reviews

Write a Review

 
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd