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Create the pro forma income statement

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Reference no: EM131190932

Mike's Place

Assets 2013 2014 Liabilities & Owners Equity 2013 2014

Current Assets Cash 815 906 Current Liabilities Account Payable 983 1292

Notes Payables 720 840

Accounts Receivables 2405 2510 Other 105 188

Inventory 4608 4906 Total CL 1808 2320

Total Cash 7828 8322 Long term Debt 4817 4960

Fixed Assets Owner's Equity

Common Stock 10000 10000

Net PPE 15164 19167

Total Assets 22992 27489 Retained Earnings 6367 10209

Total OE    16367 20209

Total Liabilities & OE 22992 27489

Income Statement 2014

Sales 33500

Cost of Goods Sold 18970

Depreciation 1980

EBIT 12550

Int 486

EBT 12064

Taxes 4222

NI 7842

A. Suppose Mick's is projecting a 20% increase in sales for the coming year, and that cost of goods sold and all expenses remain a constant percentage of sales. Also assume that the amount of depreciation and interest paid and the firm's tax rate (35%) remain unchanged, Create the Pro Forma Income statement for 2055. Assume the firm's dividend payout is 50%. What will the firm pay out in dividends in 2015.

B. Assume all information given in part A. Also, assume all assets and current liabilities are proportional to sales but notes payable, long-term debt and common stock are not proportional to sales. If the firm's tax rate remains unchanged, the dividend payout is 55% what is the external financing needed (EFN) for 2015? Create the Pro Forma Balance Sheet for 2015?

C. Given the information in part A & B. If the firm is only operating at 82% of capacity, what are the full capacitiy sales and what is the external financing needed (EFN) for 2005?

Reference no: EM131190932

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