Essay on Microchip Computer Corporation

661 Words Apr 27th, 2012 3 Pages
Grade Received - "B+"

Click here to download the selected financial statements for Micro Chip Computer Corporation. Answer questions 1 and 2 below based on the financial data.

Determine the year-to-year percentage annual growth in total net sales.
Based only on your answers to question #1, do you think the company acheived its sales goal of +10% annual revenue growth in 2009? Determine the target revenue figure, and explain why you do or do not feel that the company hit its target.
Next, consider Micro Chip's Consolidated Statement of Operations for the year ended September 25, 2008. Download the file here and answer questions 1 and 2.

Use the Percentage Sales Method and a 20% increase in sales to forecast Micro Chip's
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Since the year 2005, the average growth rate has been -3.15% over the past four years. Based on the financial data sheet, I do not believe that the company will be able to reach a 10% sales goal and 2009.

Current % of Sales 2008/2009 Estimate
Sales $8,334 -- $10,000
Cost of Sales $5,458 5458*100/8334 = 65.5% 65.5% of 10000 = $6,550
Gross Margin $2,876 2876*100/8334 = 34.5% 34.5% of 10000 = $3,450
R & D $525 525*100/8334 = 6.3% 6.3% of 10000 = $630
Selling, General and Adim $691 691*100/8334 = 8.3% $830

In-Process R & D --- --- ---

Restructuring Cost --- --- 2% of 10000 = $200

Total Operating
Expenses $1,216 --- 630 + 830 + 200 = $1,660

Operating Income $1,660 --- 3450 – 1660 =