( the sample statements are attached)
Decide upon an initiative you want to implement that would increase sales over the next five years, (for example, market another product, corporate expansion, and so on).
Using the sample financial statements, create pro forma statements of five year projectionsthat are clear, concise, and easy to read. Be sure to double check the calculations in your pro forma statements. Make assumptions that support each line item increase or decrease for your forecasted statements.
Discuss and interpret the financials in relation to the initiative. Make recommendations on potential discretionary financing needs.
Write a 350 – 700 word analysis of the company’s short term and long term financing needs and determine strategies for the company to manage working capital.
Click the Assignment Files tab to submit your assignment.
XYZ Company, INC.
Profit and Loss Statement
Year Ended December 31, 20XX
Returns and allowances 2,752
Net Sales 1,747,698 100.0
Cost of Sales
Beginning Inventory 50,000
Production Labor 420,108
Ending Inventory 30,000
Total Cost of Sales 1,050,270 60.1
Gross Profit 697,428 39.9
Total Selling Expenses 125,000 7.2
Payroll taxes 29,000
Office Supplies 500
Professional Fees 2,000
Training & Education 250
Total Operating Expense 285,850 16.4
Operating Profit—EBITDA 286,578 16.4
Other Income (Expense)
Total Other Income (Expense) (24,150)
Total Pre-tax Profit 262,428 15.0
Income Tax Allowance 118,093
Net Profit 144,335 8.3XYZ Company, INC.
For Year Ending December 31, 20XX
Accounts Receivable 27,000
Prepaid Expenses 2,000
Total Current Assets 69,525
Property—net of depreciation 215,000
Equipment—net of depreciation 80,000
Vehicles—net of depreciation 5,000
Total Fixed Assets 300,000
Total Assets 369,525
Revolving lines of credit 20,000
Accounts Payable 5,000
Current Portion of Long-term Debt 15,000
Total Current Liabilities 40,000
Long-term debt and capital leases 45,500
Loans payable to stockholders 60,500
Total Long-term Liabilities 106,000
Total Liabilities 146,000
Common stock 1,000
Additional Paid-in Capital 25,000
Retained Earnings (Cum from prior years) 53,190
Retained Earnings (From current P&L) 144,335
Total Stockholders Equity 223,525
Total Liabilities and Stockholders Equity 369,525