Question

Global Corp. expects sales to grow by 7 % next year. Using the percent of sales method and the data provided in the given tables​, ​forecast: a. Costs except depreciation b. Depreciation c. Net income d. Cash e. Accounts receivable f. Inventory g.​ Property, plant, and equipment h. Accounts payable ​(​Note: Interest expense will not change with a change in sales. Tax rate is 26%.)

Income Statement​ ($ million)			Balance Sheet​ ($ million)
Net Sales	185.4185.4		Assets
Costs Except Depreciation	negative 174.1−174.1		Cash	23.723.7
EBITDA	11.311.3		Accounts Receivable	18.418.4
Depreciation and Amortization	negative 1.3−1.3		Inventories	15.115.1
EBIT	1010		Total Current Assets	57.257.2
Interest Income​ (expense)	negative 7.7−7.7		Net​ Property, Plant, and Equipment	112.9112.9
​Pre-tax Income	2.32.3		Total Assets	170.1170.1
Taxes ​(2626​%)	negative 0.6−0.6
Net Income	1.71.7		Liabilities and Equity
			Accounts Payable	35.535.5
			​Long-Term Debt	113.4113.4
			Total Liabilities	148.9148.9
			Total​ Stockholders' Equity	21.221.2
			Total Liabilities and Equity	170.1170.1

Answer 1

Income Statement​ ($ million)		% of sales	Balance Sheet​ ($ million)		% of sales
Net Sales	185.4		Assets
Costs Except Depreciation	-174.1	93.91%	Cash	23.7	12.78%
EBITDA	11.3		Accounts Receivable	18.4	9.92%
Depreciation and Amortization	-1.3		Inventories	15.1	8.14%
EBIT	10.0		Total Current Assets	57.2	30.85%
Interest Income​ (expense)	-7.7		Net​ Property, Plant, and Equipment	112.9	60.90%
​Pre-tax Income	2.3		Total Assets	170.1	91.75%
Taxes	0.6
​(26​%)
Net Income	1.7		Liabilities and Equity
			Accounts Payable	35.5	19.15%
			​Long-Term Debt	113.4
			Total Liabilities	148.9
			Total​ Stockholders' Equity	21.2
			Total Liabilities and Equity	170.1
FORECASTS:
Sales = 185.4*107% =	$            198.4
Costs other than depreciation = 198.4*93.91% =	$            186.3
Depreciation [Same-does not vary with sales]	$                 1.3
Net income:
Sales	$            198.4
Costs other than depreciation	$            186.3
Depreciation	$                 1.3
EBIT	$               10.8
Tax at 26%	$                 2.8
NI	$                 8.0
Cash = 198.4*12.78% =	$               25.4
Accounts receivable = 198.4*9.92% =	$               19.7
Inventory = 198.4*8.14% =	$               16.1
Property, plant and equipment = 198.4*91.75% =	$            182.0
Accounts payable = 198.4*19.15% =	$               38.0