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Please use the following instructions for guidance in completing this module. 1. Use the information and assumptions in the Analysis Data tab for forecasting the financial statements for Industrial...

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Please use the following instructions for guidance in completing this module.
1. Use the information and assumptions in the Analysis Data tab for forecasting the financial statements for Industrial Company.
Provide your 5-year projections for the Income Statement, Cash Flow Statement, and Balance Sheet on the Forecasted Statements
tab. * Sales volume (demand) should be the basis for your revenue determination.
2. Provide basic margin and ratio analysis for forecasted financials, including ratios pertaining to liquidity and productivity.
3. Based upon your projections and analysis, provide a 2-page synopsis of findings and sources of potential improving cash flow and operating
efficiency.

Answered Same Day Apr 29, 2020

Solution

Pulkit answered on Apr 30 2020
128 Votes
CBUS 454 Financial Analysis and Decising-Making
Information Sheet
    Industrial Company Analysis
    Forecasting Project
    The purpose of this final examination is to determine student's ability to do basic forecasting and operations performance
    benchmarking and assessment. Please use the following instructions for guidance in completing this module.
    1. Use the information and assumptions in the Analysis Data tab for forecasting the financial statements for Industrial Company.
    Provide your 5-year projections for the Income Statement, Cash Flow Statement, and Balance Sheet on the Forecasted Statements
    tab. * Sales volume (demand) should be the basis for your revenue determination.
    2. Provide basic margin and ratio analysis for forecasted financials, including ratios pertaining to liquidity and productivity.
    3. Based upon your projections and analysis, provide a 2-page synopsis of findings and sources of potential improving cash flow and operating
    efficiency.
    You will have until Monday, 11:59pm to upload the document. Upon completion please upload into CANVAS
    Thank you.
mailto:[email protected].%20%20Thank%20you%20and%20good%20luck.
Analysis Data
    INDUSTRIAL COMPANY
    Competency Evaluation
    Forecast Assumptions
    Unit Economics                        Working Capital
            Manufactured Goods        Supplies
    Sell Price (per widget)        $ 149.69        $ 52.62        Required Cash        $ 500,000
    Cost of Goods Sold                        Inventory Turnover        12
     Materials        $ 35.00        $ 36.78        Days Sales Outstanding        30
     Production        16.00                Days Payable        45
     Labor        48.75                Days per Year        365
    Sales Volume        42,092        105,244
    Annual Growth Rates                        Property, Plant and Equipments
    Sell Price        5.97%        2.57%                        Useful Life (Years)        Capital Expenditure
    Cost of Goods Sold        2.00%        1.00%        Machinery and Equipment, including Vehicles                6        $ 200,000    per yea
    Sales Volume        8.00%        10.00%        Leasehold Improvements                10        $ 400,000    per yea
                            *Use a Depreciation Schedule to Forecast PP&E
    Average Sales Tax on Gross Sales            5.20%
                            Debt Schedule
    Operating Expenses
                            Prime        8.25%
    Non-Production Employees        12
    Average Salary        $ 45,000    , increasing 3.7% per year            Credit Facility
                            Interest Rate        Prime + 150 bps
    Sales Employees        5                Credit Limit        $4,000,000
    Average Salary        $ 52,000    , increasing 3.7% per yea
    Sales Bonus (% of Salary)        20.0%                Mortgage
                            Original Principal        $2,000,000
    FICA        7.65%                Interest Rate        Prime + 150 bps
    Other Benefits        10.50%                Term        20    years
    Administrative Expenses        8.00%
                            Equipment Note
                            Original Principal        $2,000,000
                            Interest Rate        Prime + 150 bps
                            Term        10    years
    Historical Financials
                    Actual                        Actual
    Balance Sheet                Year 0        Income Statement                Year 0
    Cash and Cash Equivalents                $ 665,012.6        Manufactured Goods                $ 5,998,091.7
    Accounts Receivables                927,946.4        Supplies                5,291,922.5
    Inventory                674,248.9        Sales                11,290,014.2
    Prepaid Expenses                66,871.3
    Dues for Affiliates                5,361.2        Manufactured Goods                (4,198,334.5)
    Defe
ed Tax Asset                85,866.7        Supplies                (3,892,652.0)
                            Cost of Sales                (8,090,986.5)
    Total Cu
ent Assets                2,425,307.0
                            Gross Profit                $ 3,199,027.6
    Machinery and Equipment, including Vehicles                2,526,729.7
    Land                200,000.0        Total Operating Expenses                (1,241,901.6)
    Leasehold Improvements                1,984,086.0
                            EBITDA                1,957,126.1
    Total Property, Plant and Equipment...
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