Problem:
See the information for the selected financial statements for Micro Chip Computer Corporation. Answer questions 1 and 2 below based on the financial data.
Micro Chip Computer Corporation
Consolidated Statements of Operations For the period September 26, 2007 through
September 25, 2008
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Sales
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$8,334.00
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Cost of Sales
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$5,458.00
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Gross Margin
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$2,876.00
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Operating expenses:
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R & D
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$525.00
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Selling, General, and Administrative
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$691.00
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In-process R & D
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|
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Restructuring costs
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|
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Total Operating Exp
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$1,216.00
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Operating income
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$1,660.00
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Total interest and other Income net
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$194.00
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Income before provision for Income taxes
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$1,854.00
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Provision for income Taxes (15%)
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$278.10
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Net income
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$1,575.90
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Question 1: Determine the year-to-year percentage annual growth in total net sales.
Question 2: Based only on your answers to question #1, do you think the company will hit 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 can hit this target.
Next, consider Micro Chip's Consolidated Statement of Operations for the year ended September 25, 2008 and answer questions 1 and 2.
Use the Percentage Sales Method and a 20% increase in sales to forecast Micro Chip's Consolidated Statement of Operations for the period September 26, 2007 through September 25, 2008. Assume a 15% tax rate and restructuring costs of 2% of the new sales figure.
Discuss your results from question number #1. What assumptions have you made? Do any of your assumptions seem unreasonable?
Please show all steps.