Prepare a pro forma balance sheet for upcoming fiscal year

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Prepare a pro forma balance sheet for the upcoming fiscal year. Company X's current balance sheet, submitted at the end of their fiscal year, September 30, 2015, is displayed below. Company X has a policy of maintaining a cash balance of $75,000. The company plans to acquire a new building for 90,000, and purchase new equipment for $15,000 over the next year. Net sales over the previous year were $3.6 million and the company expects sales to grow by 8% in the next year, with a gross margin of 12%. Purchases of materials are expected to be $3.5 million, the collection period is expected to be 30 days and accounts payable will be 15 days. Net Income is anticipated to be 1.5% of sales, and the tax rate is 30%. Company policy is to have a retention ratio of 20%, and depreciation is expected to be $40,000 over the coming year

Company X Balance Sheet as of Sept 30, 2015
Cash 89.4
A/R 300
Inventory 156.5
Current Assets 545.9
PP&E 306.7
Ace'd Depreciation 102.4
Net Fixed Assets 204.3
Other Assets 45.2
Total Assets 795.4

A/P 135,6
Notes Payable 90
Accrued Expenses & Taxes 19.4
Long-term Debt 260
Total Liabilities 505
Capital Stock 275
Retained Earnings 15.4
Total Equity 290.4
Total Liabilities & Shareholder Equity 795.4

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This paper analyses the investment terms and condition and the overall project requirements for the purpose of understanding how the project would operate. In this we have considered various aspects including the Sensitivity Analysis, the Terminal Value analysis and other terms for the purpose of investment decision making.

Reference no: EM13846589

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