Projection Analysis

Oct 5th, 2017
Anonymous
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Price: $15 USD

Question description

3 page, double-spaced analysis as detailed in the PDF.

SIC55(-) Auto Dealers, etc. 2002 2003 2004 2005 Cash 338,234 338,234 572,802 621,064 Accounts Receivable 170,370 170,370 375,856 976,236 2,548,488 2,846,719 3,095,009 3,213,078 287,388 341,442 333,749 421,014 3,344,480 3,696,765 4,377,415 5,231,392 498,989 543,774 578,395 584,870 ASSETS Inventories Other Current Assets Current Assets Fixed Assets Other Noncurrent Assets Total Assets 155,374 196,391 207,139 210,250 3,998,843 4,436,929 5,162,949 6,026,513 387,580 211,473 223,320 233,060 LIABILITIES & NET WORTH Accounts Payable Short-term Debt 659,984 56,393 46,318 51,383 Other Current Liabilities 1,484,692 261,600 282,872 328,486 Current Liabilities 2,532,256 529,466 552,510 612,929 424,103 208,341 200,161 212,873 Other Noncurrent Liabilities 7,280 3,133 3,308 1,835 Total Liabilities Net Worth Total Liabilities & Net Worth 2,963,639 1,035,204 3,998,843 740,940 3,695,989 4,436,929 755,979 4,406,970 5,162,949 827,637 5,198,876 6,026,513 INCOME STATEMENT Sales 3,360,660 4,122,287 Cost of Goods Sold 2,355,823 2,889,723 Gross Profit 1,004,837 1,232,564 SGA Expense 794,590 1,037,451 Operating Income (EBIT) 210,247 195,113 Interest 108,409 26,473 Before-tax Profit 101,838 168,639 Income Tax 34,625 57,337 After-tax Profit 67,213 111,302 Data from Robert Morris Associates (from bank loan applications) 4,495,163 3,173,585 1,321,578 1,113,038 208,540 24,648 183,892 62,523 121,369 4,893,645 3,464,701 1,428,944 1,194,909 234,035 26,426 207,609 70,587 137,022 Long-term Debt Number of companies ASSETS Cash Accounts Receivable Notes Receivable Inventories Other Current Assets Current Assets Fixed Assets Other Noncurrent Assets Total Assets LIABILITIES & NET WORTH Accounts Payable 2,163 1,855 1,351 1,113 415,412 318,994 20,014 2,548,488 287,388 3,590,296 498,989 155,374 4,244,660 481,418 371,641 23,293 2,846,719 341,442 4,064,513 543,774 196,391 4,804,677 542,654 375,856 30,148 3,095,009 333,749 4,377,415 578,395 207,139 5,162,949 597,549 976,236 23,514 3,213,078 421,014 5,231,392 584,870 210,250 6,026,513 387,580 408,947 422,399 449,456 Bank Loans Notes Payable Other Current Liabilities Current Liabilities Long-term Debt Deferred Credits Total Liabilities Net Worth Total Liabilities & Net Worth INCOME STATEMENT Sales Cost of Goods Sold Gross Profit SGA Expense Operating Income (EBIT) Interest Before-tax Profit Income Tax After-tax Profit 8,953 651,031 1,484,692 2,532,256 424,103 7,280 2,963,639 1,281,021 4,244,660 20,680 736,319 1,925,959 3,091,905 449,595 4,074 3,545,574 1,259,103 4,804,677 28,306 832,771 1,743,396 3,026,871 511,724 10,326 3,548,921 1,614,028 5,162,949 12,632 724,277 2,076,226 3,262,591 512,127 7,384 3,782,102 2,244,411 6,026,513 14,093,017 11,218,501 2,874,516 2,396,584 477,932 108,409 369,523 125,638 243,885 15,650,403 12,451,547 3,198,856 2,474,022 724,834 120,659 604,175 205,419 398,755 15,159,467 12,010,964 3,148,503 2,601,497 547,006 137,280 409,726 139,307 270,419 16,550,260 13,194,929 3,355,331 2,698,068 657,264 124,904 532,360 181,002 351,358 growth rate 50.00% Income Statement 2005 2006(F) Sales 4,893,645 7,340,468 Expenses 4,686,036 7,029,054 Before-tax Income 207,609 311,414 Taxes (40 percent) 83,044 124,565 124,565 186,848 After-tax Income Dividends 62,283 62,283 Additional Retained Earnings 62,283 124,565 Expenses-to-Sales Ratio 0.957575776 Balance Sheet 2005 2006(P) 2006(F) Cash 621,064 931,596 931,596 Accounts Receivable 976,236 1,464,354 1,464,354 3,213,078 4,819,617 4,819,617 421,014 631,520 631,520 Current Assets Fixed Assets Total Assets Accounts Payable Notes Payable Other Current Liabilities Current Liabilities Long-term Liabilities Net Worth Total Liabilities & Net Worth Additional Funds Needed 5,231,392 795,121 6,026,513 233,060 51,383 328,486 612,929 214,708 5,198,876 6,026,513 7,847,088 1,192,681 9,039,769 349,590 51,383 492,729 893,702 214,708 5,323,441 6,431,851 2,607,918 7,847,088 1,192,681 9,039,769 349,590 1,355,342 492,729 2,197,661 1,518,667 5,323,441 9,039,769 Cash-to-Sales Ratio Accts. Rec.-to-Sales Ratio Inventories-to-Sales Ratio Other C.A.-to-Sales Ratio Fixed Assets-to-Sales Ratio Acct. Pay.-to-Sales Ratio Other C.L.-to-Sales Ratio 0.126912346 0.199490626 0.656581769 0.086032731 0.162480249 0.047625032 0.067125016 Inventories Other Current Assets Financial Ratios Current Ratio Quick Ratio Debt-to-Assets Ratio Return on Equity (ROE) Return on Assets (ROA) Goal (Min. 2.00) (Min. 1.00) (Max. 0.5:1) (Min. 10%) (Min. 5%) 2005 2006(F) 8.54 3.29 0.14 2.40% 2.10% 3.57 1.38 0.41 3.50% 2.10%
Exercise  1   Financial  Forecasting       Construct  a  model  for  financial  forecasts  for  your  industry  (which  you  will  consider   to  be  a  single  company  for  this  exercise)  given  the  assumptions  that  the  industry   will:     • continue  to  pay  dividends  at  the  current  dollar  amount  (50  percent  of  net   income  of  the  current  year),     • raise  any  needed  financing  half  by  borrowing  short-­‐term  and  half  by   borrowing  long-­‐term,  and     • put  any  surplus  revenue  into  cash.     Use  this  model  to  generate  pro  forma  financial  statements  based  on  various   assumptions  for  sales  growth  from  zero  to  50  percent,  only  one  set  of  which  you  are   to  show  in  your  report.       Within  the  limitations  you  have  been  given,  in  terms  of  length  of  report  and  time  to   write  the  report,  discuss  the  implications  of  your  sales  growth  assumption  for   liquidity,  risk  and  profitability,       Make  a  recommendation  for  sales  growth.     Team  Names    1  -­‐  Elephant    9  -­‐  Alligator    2  -­‐  Falcon   10  -­‐  Seagull    3  -­‐  Dolphin   11  -­‐  Hippopotamus    4  -­‐  Lion   12  -­‐  Polar  Bear    5  -­‐  Eagle   13  -­‐  Penguin    6  -­‐  Blue  Whale   14  -­‐  Tiger    7  -­‐  Camel   15  -­‐  Impala    8  -­‐  Horse   16  -­‐  Llama    

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(Top Tutor) Stellita
School: Rice University
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PROJECTION ANALYSIS

PROJECTION ANALYSIS
Based on the analysis of the financial data from the last five years, we have performed a forecast
assuming a sales growth of 50% for the next year.
We are going to analyze the liquidity, risk, and profitability of the company and make the
recommendations and implications of our projected sales growth.

LIQUIDITY
Liquidity is the capacity of one asset to be quickly sold or bought in the market without affecting the
price of the asset. Accounting liquidity relates to the easiness to meet the financial obligations with the
liquid assets available to them. There are several ratios that express the accounting liquidity.
The most liquid asset an enterprise can have is Cash. This is because cash can be easily used to pay for
other assets, obligations, and liabilities.
There are several ratios that show the liquidity of an enterprise. One of the most used is the Current
Ratio. This ratio measures the ability of the assets of the enterprise to meet t...

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