Using the Percent-of-Sales method, please forecast 2016 using the following assumptions 2016 Cash level increased to 5% of sales 2016 Revenue growth of 25% 2016 Deprecation of $50 2016 Interest rate on short-term debt of 8% 2016 Tax rate of 35% 2016 Receivable days of 25 2016 Inventory days of 500 2016 Capital Expenditure of $60 2016 Purchases are 40% of COGS If the new value is not given above, please match the 2015 ratio (when available). USE CELL REFERENCES. Financial Ratio Analysis and Benchmarking 2012 2013 2014 2015 2016E Revenue growth 2.9% 2.4% 12.5% 15.5% Gross margin (Gross profit / Revenue) 48.9% 46.9% 51.8% 52.0% Receivable days (AR / Revenue * 365) 41.9 45.0 48.0 50.9 Inventory days (Inventory / COGS * 365) 424.2 432.1 436.5 476.3 Payable days (AP / Purchases * 365) 15.6 13.3 10.2 9.9 NFA turnover (Revenue / NFA) 2.4 2.4 2.4 3.0 HORNIMAN HORTICULTURE Projected Horniman Horticulture Financial Summary (in thousands of dollars) 2012 2013 2014 2015 2016E CORRECT VALUE TO MATCH Profit and loss statement Revenue 788.5 807.6 908.2 1048.8 Cost of goods sold 402.9 428.8 437.7 503.4 Gross profit 385.6 378.8 470.5 545.4 SG&A expense 301.2 302.0 356.0 404.5 Interest expense 0.0 0.0 0.0 0.0 Depreciation 34.2 38.4 36.3 40.9 Operating profit 50.2 38.4 78.2 100.0 115.5 Taxes 17.6 13.1 26.2 39.2 Net profit 32.6 25.3 52.0 60.8 Balance sheet Cash 120.1 105.2 66.8 9.4 Accounts receivable 90.6 99.5 119.5 146.4 Inventory1 468.3 507.6 523.4 656.9 Other current assets2 20.9 19.3 22.6 20.9 Current assets 699.9 731.6 732.3 833.6 Net fixed assets3 332.1 332.5 384.3 347.9 Total assets 1032.0 1064.1 1116.6 1181.5 1401.4 Accounts payable 6.0 5.3 4.5 5.0 Short-term debt 0.0 0.0 0.0 0.0 132.4 Wages payable 19.7 22.0 22.1 24.4 Other payables 10.2 15.4 16.6 17.9 Current liabilities 35.9 42.7 43.2 47.3 Net worth (Shareholder Equity) 996.1 1021.4 1073.4 1134.2 Total Liabilities and Shareholder Equity 1032.0 1064.1 1116.6 1181.5 1401.4 Capital expenditure 22.0 38.8 88.1 4.5 Purchases4 140.8 145.2 161.2 185.1

Using the Percent-of-Sales method, please forecast 2016 using the following assumptions 2016 Cash level increased to 5% of sales 2016 Revenue growth of 25% 2016 Deprecation of $50 2016 Interest rate on short-term debt of 8% 2016 Tax rate of 35% 2016 Receivable days of 25 2016 Inventory days of 500 2016 Capital Expenditure of $60 2016 Purchases are 40% of COGS If the new value is not given above, please match the 2015 ratio (when available). USE CELL REFERENCES. Financial Ratio Analysis and Benchmarking 2012 2013 2014 2015 2016E Revenue growth 2.9% 2.4% 12.5% 15.5% Gross margin (Gross profit / Revenue) 48.9% 46.9% 51.8% 52.0% Receivable days (AR / Revenue * 365) 41.9 45.0 48.0 50.9 Inventory days (Inventory / COGS * 365) 424.2 432.1 436.5 476.3 Payable days (AP / Purchases * 365) 15.6 13.3 10.2 9.9 NFA turnover (Revenue / NFA) 2.4 2.4 2.4 3.0 HORNIMAN HORTICULTURE Projected Horniman Horticulture Financial Summary (in thousands of dollars) 2012 2013 2014 2015 2016E CORRECT VALUE TO MATCH Profit and loss statement Revenue 788.5 807.6 908.2 1048.8 Cost of goods sold 402.9 428.8 437.7 503.4 Gross profit 385.6 378.8 470.5 545.4 SG&A expense 301.2 302.0 356.0 404.5 Interest expense 0.0 0.0 0.0 0.0 Depreciation 34.2 38.4 36.3 40.9 Operating profit 50.2 38.4 78.2 100.0 115.5 Taxes 17.6 13.1 26.2 39.2 Net profit 32.6 25.3 52.0 60.8 Balance sheet Cash 120.1 105.2 66.8 9.4 Accounts receivable 90.6 99.5 119.5 146.4 Inventory1 468.3 507.6 523.4 656.9 Other current assets2 20.9 19.3 22.6 20.9 Current assets 699.9 731.6 732.3 833.6 Net fixed assets3 332.1 332.5 384.3 347.9 Total assets 1032.0 1064.1 1116.6 1181.5 1401.4 Accounts payable 6.0 5.3 4.5 5.0 Short-term debt 0.0 0.0 0.0 0.0 132.4 Wages payable 19.7 22.0 22.1 24.4 Other payables 10.2 15.4 16.6 17.9 Current liabilities 35.9 42.7 43.2 47.3 Net worth (Shareholder Equity) 996.1 1021.4 1073.4 1134.2 Total Liabilities and Shareholder Equity 1032.0 1064.1 1116.6 1181.5 1401.4 Capital expenditure 22.0 38.8 88.1 4.5 Purchases4 140.8 145.2 161.2 185.1

Financial Management: Theory & Practice

16th Edition

ISBN:9781337909730

Author:Brigham

Publisher:Brigham

Chapter12: Corporate Valuation And Financial Planning

Section: Chapter Questions

Problem 8P: Stevens Textile Corporations 2019 financial statements are shown here. Stevens grew rapidly in 2019...

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Question

Using the Percent-of-Sales method, please forecast 2016 using the following assumptions
2016 Cash level increased to 5% of sales
2016 Revenue growth of 25%
2016 Deprecation of $50
2016 Interest rate on short-term debt of 8%
2016 Tax rate of 35%
2016 Receivable days of 25
2016 Inventory days of 500
2016 Capital Expenditure of $60
2016 Purchases are 40% of COGS If the new value is not given above, please match the 2015 ratio (when available).

USE CELL REFERENCES.

Financial Ratio Analysis and Benchmarking
	2012	2013	2014	2015	2016E
Revenue growth	2.9%	2.4%	12.5%	15.5%
Gross margin (Gross profit / Revenue)	48.9%	46.9%	51.8%	52.0%

Receivable days (AR / Revenue * 365)	41.9	45.0	48.0	50.9
Inventory days (Inventory / COGS * 365)	424.2	432.1	436.5	476.3
Payable days (AP / Purchases * 365)	15.6	13.3	10.2	9.9
NFA turnover (Revenue / NFA)	2.4	2.4	2.4	3.0



HORNIMAN HORTICULTURE
Projected Horniman Horticulture Financial Summary (in thousands of dollars)


	2012	2013	2014	2015	2016E	CORRECT VALUE TO MATCH
Profit and loss statement
Revenue	788.5	807.6	908.2	1048.8
Cost of goods sold	402.9	428.8	437.7	503.4
Gross profit	385.6	378.8	470.5	545.4
SG&A expense	301.2	302.0	356.0	404.5
Interest expense	0.0	0.0	0.0	0.0
Depreciation	34.2	38.4	36.3	40.9
Operating profit	50.2	38.4	78.2	100.0		115.5
Taxes	17.6	13.1	26.2	39.2
Net profit	32.6	25.3	52.0	60.8

Balance sheet
Cash	120.1	105.2	66.8	9.4
Accounts receivable	90.6	99.5	119.5	146.4
Inventory¹	468.3	507.6	523.4	656.9
Other current assets²	20.9	19.3	22.6	20.9
Current assets	699.9	731.6	732.3	833.6
Net fixed assets³	332.1	332.5	384.3	347.9
Total assets	1032.0	1064.1	1116.6	1181.5		1401.4

Accounts payable	6.0	5.3	4.5	5.0
Short-term debt	0.0	0.0	0.0	0.0		132.4
Wages payable	19.7	22.0	22.1	24.4
Other payables	10.2	15.4	16.6	17.9
Current liabilities	35.9	42.7	43.2	47.3
Net worth (Shareholder Equity)	996.1	1021.4	1073.4	1134.2
Total Liabilities and Shareholder Equity	1032.0	1064.1	1116.6	1181.5		1401.4

Capital expenditure	22.0	38.8	88.1	4.5
Purchases⁴	140.8	145.2	161.2	185.1

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