Use historical financial statements for the years 2000,2001 and 2002 to develop pro forma financial statements for the company (both an income statement and a balance sheet). As outlined in the case, your firm projects a 20% increase in sales for 2003 and 2004.
Exhibit 1 Financial Statements.
| For years ending 12/31 |
2000 |
2001 |
2002 |
| |
|
|
|
| INCOME STATEMENT |
|
|
|
| |
|
|
|
| Net sales |
$16,230 |
$20,355 |
$23,505 |
| Cost of sales |
9,430 |
11,898 |
13,612 |
| Gross profit |
6,800 |
8,457 |
9,893 |
| Selling, general, and administrative expenses |
5,195 |
6,352 |
7,471 |
| Depreciation |
160 |
180 |
213 |
| Net interest expense |
119 |
106 |
94 |
| Pre-tax income |
1,326 |
1,819 |
2,115 |
| Income taxes |
546 |
822 |
925 |
| Net income |
$780 |
$997 |
$1,190 |
| |
|
|
|
| Dividends |
$155 |
$200 |
$240 |
| |
|
|
|
| BALANCE SHEET |
|
|
|
| |
|
|
|
| Assets |
|
|
|
| Cash |
$508 |
$609 |
$706 |
| Accounts receivable |
2,545 |
3,095 |
3,652 |
| Inventories |
1,630 |
1,838 |
2,190 |
| Total current assets |
4,683 |
5,542 |
6,548 |
| |
|
|
|
| Gross plant & equipment |
3,232 |
3,795 |
4,163 |
| Accumulated depreciation |
1,335 |
1,515 |
1,728 |
| Net plant & equipment |
1,897 |
2,280 |
2,435 |
| |
|
|
|
| Total assets |
$6,580 |
$12,122 |
$8,983 |
| |
|
|
|
| LIABILITIES |
|
|
|
| |
|
|
|
| |
|
|
|
Current maturities of
long-term debt |
$125 |
$125 |
$125 |
| Accounts payable |
1,042 |
1,325 |
1,440 |
| Accrued expenses |
1,145 |
1,432 |
1,653 |
| Total current liabilities |
2,312 |
2,882 |
3,218 |
| |
|
|
|
| Long-term debt |
1,000 |
875 |
750 |
| |
|
|
|
| Common stock |
1,135 |
1,135 |
1,135 |
| Retained earnings |
2,133 |
2,930 |
3,880 |
| Total shareholders' equity |
3,268 |
4,065 |
5,015 |
| |
|
|
|
| Total liabilities |
$6,580 |
$7,822 |
$8,983 |