Question

Jim's expresso expects sales to grow by 9.9% next year. Using the following statements. and the percent of sales method, forecast:

a. Costs

b.Depreciation

c. Net Income

d. Cash

e. Accounts Receivable

f. Inventory

g. Property, plant, and equipment

Income Statement

Sales . $194,890

Costs Except (99,240)

EBITDA $95,650

Depreciation (5,940)

EBIT $89,710

Interest Expense (net) (210)

Pre-tax Income $89,500

Income Tax (31,325)

Net Income $58,175

Balance Sheet

Assets

Cash and Equivalents $15,050

Accounts Receivable 1,980

Inventories 3,940

Total Currents Assets $20,970

Property. Plant, and Equipment 10,040

Total Assets $31,010

Liabilities and Equity

Accounts Payable $1,450

Debt 4,050

Total Liabilities $5,500

Stockholders' Equity 25,510

Total Liabilities and Equity $31,010

Answer 1

As per rules I am answering the first 4 subparts of the question

a. Costs = Present costs*(1+0.099)

= 99240*1.099

=109064.76

b.Depreciation = 5940

(There is no impact of increase in sales on depreciation since it represents wear and tear of the fixed assets)

c. Net Income: 64330.08

	Present Forecast
Sales	194890	214184.11
Costs	99240	109064.76
EBITDA	95650	105119.4
DeprecIation	5940	5940
EBIT	89710	99179.35
Interest	210	210
Pre tax Income	89500	98969.35
Income tax	31325	34639.27
Net Income	58175	64330.08

d: Cash = Present cash *(1+0.099)

= 15050*109.9%

= $16539.95

WORKINGS