The FINC 5000 Associates Corporation (FAC)

The FINC 5000 Associates Corporation (FAC)

1. The FINC 5000 Associates Corporation (FAC) has begun selling a new product and they want you to help them with next years pro forma financial statements. Using the worksheet below, complete the companys 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 CorporationFinancial ForecastEstimatedThis year for next yearSales $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) =


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