Reference no: EM133464043
Assignment: Forecasting With the Percentage of Sales Method Calculation
Length: 5 pages.
Part 1: Forecasting with the Percentage of Sales Method calculation:
Utilizing the fictitious company Tag-It Corporation, prepare next year's forecast in a pro forma income statement. Tag-It's CEO requested a report of a forecast with an increase in total revenue of 20% for next year. Prepare a forecast for next year utilizing the percentage of sales method, and complete the column in the forecast section on the Excel spreadsheet below. Here is the current income statement for Tag-It:
Part 2: Analyze the growth rate in sales and the CEO's prediction
A. The total revenue numbers over the past 5 years for Tag-It Corporation were as follows (values in millions):
a. 2018 72,710
b. 2019 75,360
c. 2020 78,112
d. 2021 93,561
B. Determine whether you think Tag-It can hit the target of a 20% increase in sales next year.
Part 3: Develop the CEO's report with your findings.
Prepare a 5-page report that includes a pro forma forecast using the template provided and an analysis of Tag-It's ability to hit the 20% increase in sales in a separate word document.