Question

Construct Albert Retail Co's Pro Forma Income Statement and Balance Sheet for Years 1 to 3 under the following policies:

COGS+SG&A+Depreciation = 60% of Revenue

Dividend Payout = 50%

Current Assets = 40% of Revenue

Net Fixed Assets = 60% of Revenue

Current Liabilities = 70% of Current Assets

Corporate Tax Rate = 21%

	Year
	0(2018)	1	2	3
Revenue	150.0	195.0	253.5	253.5
COGS+SG&A+Depreciation	90.0
EBIT	60.0
Tax (21%)	12.6
Net Income	47.4
Dividends	23.7
Addition to Retained Earnings	23.7
Current Assets	60.0
Net Fixed Assets	90.0
Total Assets	150.0
Current Liabilities	42.0
Long-Term Liab - Debt	30.0

Answer 1

Solution:-

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