Consider the below Consolidated Statement of Operations for the year ending September 25, 2009 and answer the following questions.
1. Use the Percentage Sales Method and a 20% increase in sales to forecast the Consolidated Statement of Operations for the period September 26, 2008 through September 25, 2009. Assume a 15% tax rate and restructuring costs of 2% of the new sales figure.
2. Discuss your results from question number #1. What assumptions have you made? Do any of your assumptions seem unreasonable?
Show all work, including formulas and calculations used to arrive at financial values. If using Excel please provide an adequate explanation of the methodology used to arrive at the answer.
Sales $8,334.00
Cost of Sales $5,458.00
Gross Margin $2,876.00
Operating Expenses:
R&D $525.00
Selling, General & Admin $691.00
In-Process R&D $0.00
Restructuring Costs $0.00
Total Operating Expense $1,216.00
Operating Income $1,660.00
Tot Int. & oth Income net $194.00
Income Before Provision for Income Tax $1,854.00
Provision for Income Tax (15%) $278.10
Net Income $1,575.90