Problem Two: Forecasting Financial Statements (5 points) Using the forecasted income statement and...

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Problem Two: Forecasting Financial Statements (5 points) Using the forecasted income statement and balance sheet and additional notes provided in the attached excel file (Final Exam, tabs Great Falls BS, and Great Falls IS), please answer the following questions: a. Prepare a forecasted statement of cash flows for the company for 2020 assuming the following assumptions. Depreciation expense to start of year PPE, net 21.2% Amortization expense to start of year intangible assets, net 4.9% CAPEX to total net sales 1.8% Dividends to net earnings 33.5% b. Assume that net sales will grow by 1.16%, 2.16%, 3.16% and 4.16% for the next five years 2020, 2021, 2022, 2023, and 2024. Use the parsimonious method of forecasting to project net operating profit after tax (NOPAT) and net operating assets (NOA) for 2020 through 2023, inclusive. (2 points) c. Describe the difference between the full forecast of financial statements and the parsimonious method. When is one preferable to the other? Please support your answer. (3 points)

Rochak · Accepted Answer

a. Cash Flow
	Particulars
	Amount
	Net Income
	129,482
	Add: Depreciation
	12,044
	Less: Capex
	40,882
	Less: Working Capital
	10,000
	Cash Flow
	90,644
b. Net Operating Profit After Tax = 111,923
Net Operating Assets = 1,020,000
c.

Problem Two: Forecasting Financial Statements (5 points) Using the forecasted income statement and balance sheet and additional notes provided in the attached excel file (Final Exam, tabs Great Falls...

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