Requirements:(a) Compute for the percentage of sales for 2016(b) Make a projected income statement for 2016 2015%2016Sales700Cost of sales500Gross profit200Operating expenses40Net income160Additional information:a) The company projected a 25% increase in sales in 2016.b) Sales is assumed to be 100% and cost of sales, gross profit and expenses are based on

The income statement is prepared to find the net income or loss incurred during the period.

2015 2016 Sales 700 Cost of sales 500 Gross profit 200 Operating expenses 40 Net income 160 Iditional information: a) The company projected a 25% increase in sales in 2016. b) Sales is assumed to be 100% and cost of sales, gross profit and expenses are based on

2015 2016 Sales 700 Cost of sales 500 Gross profit 200 Operating expenses 40 Net income 160 Iditional information: a) The company projected a 25% increase in sales in 2016. b) Sales is assumed to be 100% and cost of sales, gross profit and expenses are based on

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter9: Corporate Valuation And Financial Planning

Section: Chapter Questions

Problem 4P: Sales Increase Maggies Muffins Bakery generated 5 million in sales during 2018, and its year-end...

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Question

100%

Requirements: (a) Compute for the percentage of sales for 2016 (b) Make a projected income statement for 2016

2015
%
2016
Sales
700
Cost of sales
500
Gross profit
200
Operating expenses
40
Net income
160
Additional information:
a) The company projected a 25% increase in sales in 2016.
b) Sales is assumed to be 100% and cost of sales, gross profit and expenses are based on

Definition Definition Basic financial report that forecasts estimated profits, revenue, and expenses for the company in the coming year or months. Budgeted income statements are helpful for companies in planning for the future, making better decisions, and allocating available resources more effectively and efficiently.

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Sales Increase Maggies Muffins Bakery generated 5 million in sales during 2018, and its year-end total assets were 2.5 million. Also, at year-end 2018, current liabilities were 1 million, consisting of 300,000 of notes payable, 500,000 of accounts payable, and 200,000 of accruals. Looking ahead to 2019, the company estimates that its assets must increase at the same rate as sales, its spontaneous liabilities will increase at the same rate as sales, its profit margin will be 7%, and its payout ratio will be 80%. How large a sales increase can the company achieve without having to raise funds externallythat is, what is its self-supporting growth rate?
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