FINC 5000 Associates Corporation

1. The FINC 5000 Associates Corporation (FAC) has begun selling a new product and they want you to help them with next year’s pro forma financial statements. Using the worksheet below, complete the company’s forecast.



Assumptions:



To begin with, FAC is sure sales will grow 20% next year. Assume that is true. Then assume that COGS, Current Assets, and Current Liabilities all vary directly with Sales (that means if sales grows a certain percentage, then the account in question will grow by that same percentage). Assume that fixed expenses will remain unchanged and that $2,000 worth of new Fixed Assets will be obtained next year. Lastly, the current dividend policy will be continued next year.



FINC 5000 Associates Corporation

Financial Forecast



Estimated

This year for next year



Sales $10,000 ________

COGS 4,000 ________

Gross Profit 6,000 ________

Fixed Expenses 3,000 ________

Before Tax Profit 3,000 ________

Tax @ 33.3333% 1,000 ________

Net Profit $2,000 ________



Dividends $0 ________



Current Assets $25,000 ________

Net Fixed Assets 15,000 ________

Total Assets $40,000 ________



Current Liabilities $17,000 ________

Long term debt 3,000 ________

Common Stock 7,000 ________

Retained Earnings 13,000 ________

Total Liabs & Eq $40,000 ________



(AFN) = ________