(Solution) 14 Income Statement Revenues COGS Selling Cost Depreciation Operating Profit Interesst Earnigs Before Taxes Taxes Net Income Prior Year Current YEAr... | Snapessays.com


(Solution) 14 Income Statement Revenues COGS Selling Cost Depreciation Operating Profit Interesst Earnigs before taxes Taxes Net income Prior Year Current YEAr...


Question.Forecast the financing items on next year’s balance sheet for PartsCo. Assume long-term debt remains at $215 million, no external equity is raised, and no dividends are paid.If necessary, use short-term debt to finance cash shortfalls. Your forecast should be consistent with forecasts in Questions 2 and 3.

 

 

This was question 2 and 3 :2))Exhibit 3.14 presents the income statement and balance sheet for PartsCo, a

 

$900 million supplier of machinery parts. Next year, the company is expected

 

to grow revenues by 15 percent to $1,035 million. Using the methodology

 

outlined in Exhibit 9.3, forecast next year’s income statement for PartsCo.

 

Assume next year’s forecast ratios are identical to this year’s ratios. Forecast

 

depreciation as a percentage of last year’s property and equipment. Forecast

 

interest as a percentage of last year’s total debt.

 

3) Using the methodology outlined in Exhibit 3.10, forecast the operating items

 

on next year’s balance sheet for PartsCo. Forecast each balance sheet item as

 

a function of revenue, except inventory and accounts payable, which should

 

be forecast as a function of cost of sales. Your forecast should be consistent

 

with the revenue and cost of sales forecast in Question 2.Ex 9.14

 

Income Statement

 

Prior Year Current YEAr

 

Balance Sheet

 

Prior Year Current Year

 

Revenues

 

782.6

 

900

 

Working cash

 

15

 

12.3

 

COGS

 

-508.7

 

-612

 

Accounts Receivable

 

85.8

 

111

 

Selling Cost

 

-156.5

 

-171

 

Inventory

 

69.7

 

75.5

 

Depreciation

 

-27

 

-31.3

 

Current Assets

 

170.5

 

198.8

 

Operating Profit

 

90.4

 

85.7

 

Property and equipment

 

626.1

 

720

 

Interesst

 

-5

 

-7.5

 

Total Assets

 

796.6

 

918.8

 

Earnigs before taxes

 

95.4

 

78.2

 

Taxes

 

-31.1

 

-30.8

 

Liabilities and Equity

 

Prior year current year

 

Net income

 

64.3

 

47.4

 

Accounts payable

 

33.7

 

44.1

 

short term debt

 

19.4

 

current liabilities

 

33.7

 

63.5

 

long term debt

 

170

 

215

 

shareholders equity

 

592.9

 

640.3

 

liabilities and equity

 

796.6

 

918.8

 


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This question was answered on: May 23, 2022

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