FIN 571 Analyzing Pro Forma Statements
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 projections that 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 450 - 700 word analysis of the company's short term and long term financing needs and determine strategies for the company to manage working capital.
XYZ Company, INC.
Profit and Loss Statement
Year Ended December 31, 20XX
% Sales 1,750,450
Returns and allowances 2,752
Net Sales 1,747,698 100.0
Cost of Sales
Total Cost of Sales
Total Selling Expenses
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)
Interest (9,650) Depreciation (12,000) Amortization (2,500) Total Other Income (Expense) (24,150)
Total Pre-tax Profit 262,428 15.0
Income Tax Allowance 118,093
Net Profit 144,335 8.3