Pro Forma Statements This singular assignment displays an activity that might be actualized to increase sales over the following five years. The motivation behind this duty is to present pro forma statements of five year projections, and to make presumptions that help each one line item increase or decrease for the forecasted articulations. Besides, this assignment will talk about and translate the financials in connection to the activity. It will make suggestions on potential discretionary financing needs. At last, this assignment will exhibit an investigation of the organization's short and long term financing needs, and focus strategies for the organization to deal with its working capital.
Costco’s Expansion outside US – a very positive tactic. You can see a significant increase in the operating income 2010 – 47% and 2011 – 92%! Capital expenditures rose considerably to achieve those results. Costco’s competitive advantage is sustainable and company has proved it: annual growth, low operating cost, low prices, high customer loyalty plan, continuing profitability, and satisfied employees. Five years from now Costco will be standing as the industry leader if they will continue with the same philosophy, goals, strategy and mission.
(10 points) |Score | | | 2. An online store that has been successfully growing on its initial angel investment and revenues wants to invest $5 million to expand the business. The bank is willing to lend the business this money at a 10 percent interest rate over an eight-year term. Calculate the monthly payment, and explain what the business must be able to do with this money in order for this to be a smart business decision. The monthly payment would be $53,084.34.
• The milestone consideration must be reasonable relative to all deliverables and payment terms in the arrangement” Once the company has set the milestones it will recognize the revenue in the period that the milestone is achieved. MILESTONE RECOGNITION and DELIVERABLES The deliverables for SolvGen Inc that compromise to make the milestones are the research phase and the completion/launch of the instrument systems. Since SolvGen is launching different versions of their instrument systems, there are multiple milestones that the company will account for. With the project going on for five years the milestone are set by when the phases have been accomplished and the instrument systems have been launched.
Nike, Adidas, and Columbia Sportswear are all frontrunners against Under Armour in the industry. The first section of this report will cover an overview of the trends in, economics, political/legal, social/cultural-global, technology, and demographics. Economics Under Armour Company has been growing substantially. In 2008 its gross profit was $353,041, in 2009 it was $410,125, and in 2010 it only rose higher to $530,507. Its new income from operating expenses went up as well.
Outlays are securities that are used to make purchases; or to improve an asset that is already held and that will increase the value of Caledonia Products for a length of time. Caledonia Products has allocated $100,000.00 to get production started for the company; $7,900,000.00 to purchase a new operating facility along with equipment. The cost of equipment and plant, plus shipping and installation charges, plus net working capital equals a project’s initial outlay. The cost for shipping and installation is an additional $100,000.00 resulting in $8,100,000.00 in initial cash flow. These are the main examples of capital outlay.
Case 1.5 The Leslie Fay Companies February 10, 2014 1. After reviewing Leslie Fay’s financial statements, BDO Seidman should have taken a particular interest in several of the company’s financial statement items and associated ratios. Specific items of interest likely would have included net sales and other income statement accounts with large increases over the five-year period. Net sales displayed a dramatic 44 percent increase over the five-year period, even as Leslie Fay’s industry competitors were experiencing a declining sales trend during the late 1980’s and early 1990’s. In addition to the industry’s struggles, these changes should have been of significant interest to the auditors given Donald Kenia’s tendency to “pre-record” orders from customers.
The payback period is the number of years needed to recover the initial cash outlay of the capital budgeting project (Keown, Martin, Petty, & Scott, 2005, p. 292). By calculating this out it will give Caledonia key information as to which project will payout the quickest. This information is important because the investors are going to want the quickest return on their investment and this shows how many years it will take to get this return and which project will yield first. In order to calculate the payback period we use the following formula: For Caledonia we use: Project A: = 3.125 Years Project B: = 4.5 Years By looking at the above calculations we can see that project A will have a quicker payback period at 3.125 years while project B has a payback period of 4.5 years. It is easy to see that project A would be the best decision as it will have the ability to recoup the initial investment quicker than Project B.
Torres’ analysis was correct and Costco has witnessed growth in terms of its sales revenues. Five years have now passed and Torres is re-evaluating her position and asking herself what, among other things, have been the key factors that permitted Costco to reach its current position in the market it operates in. Once these factors are identified, it is vitally important to explore whether the effects brought by the aforementioned factors have an influential continuity in the future. The most purposeful and effective method of analyzing the situation is through ratio analysis. The aim of this paper is for Torres to be able to understand and answer the following questions: * How have Costco’s numbers been affected by growth?
* Accounting Rate of Return (ARR) is 76.4% * Net income growth over the next 5 years from 11.3-33%. * 4.1 Cashflows, 4.2 NPV Analysis, 4.3 Rate of Return, 4.4 Payback Period * * * * * * * * * 5.0 Pro-Forma Financial Statements 5.0 Pro-Forma Financial Statements The following financial projections are based on conservative sales forecasts by year for the next five years. 5.1 Pro-Forma Income Statement * * * The above financial statement shows a steady incremental increase in revenue over five years, due to the steady increase in popularity of designer products that are not readily available within regular retail channels. * 5.2 Pro-Forma Cash Flow Statement * Five-Year Pro Forma Cash Flow Statement | | | | | Wireless World | | | | | | | | | | | | | | | | | Optional $ or % Budget Factor | 1 | 2 | 3 | 4 | 5 | | | | 2012 | 2013 | 2014 | 2015 | 2016 | Beginning cash balance | | $0 | $635,357 | $1,129,793 | $1,762,920 | $2,577,638 | | | | | | | | | Add: Cash receipts from customers | | | | | | | | Cash sales | | 310476 | 351587 | 413681 | 491383 | 587382