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Prepare a single-step pro forma income statement

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Question - Calcor Company has been a wholesale distributor of automobile parts for domestic automakers for 20 years. Calcor has suffered through the recent slump in the domestics auto industry, and its performance has not rebounded to the levels of the industry as a whole.

Calcor's single-step income statement for the year ended November 30, 2008 as follows

CALCOR COMPANY Income Statement For the Year Ended November 30, 2008 (Thousands omitted)

Net Sales $8,400

Expenses:

Cost of goods sold 6,300

Selling Expenses 780

Administrative Expenses 980

Interest Expense 140

Total 8,120

Income before income taxes 280

Income taxes 112

Net Income $168

Prepare a single-step pro forma income statement for Calcor Company for the year ended November 30, 2009, assuming that Calcor's planned actions would be carried out, and that a 5% increase in unit sales would be realized.

Calculate the following ratios for Calcor Company for the 2008-2009 fiscal year:

  • Return on sales before interest and taxes.
  • Turnover of average assets.
  • Return on average assets before interest and taxes.

Reference no: EM131786782

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