Bab 6-Sales Forecasting
Aspen Industries
Income Statement
For the Years Ended December 31,2004 and 2003
2004
2003
Sales
285,000
190,000
Cost of Goods Sold
215,000
143,000
$
$
Gross Profit
70,000.00
47,000.00
Operating Expenses
Variable Expenses
28,500
19,000
Fixed Expenses
21,000
20,000
Depreciation
10,000
4,500
$
$
Total
59,500.00
43,500.00
Earnings Before Interest and Taxes
Interest Expenses
Earnings Before Taxes
10,500
6,100
4,400
$
1,540.00
$
2,860.00
Taxes
Net Income
Notes:
Tax Rate
Payout Ratio
Dividends
3,500
3,000
500
$
175.00
$
325.00
35%
30%
858
Aspen Industries
Balance Sheet
As of December 31,2004 and 2003
Assets
Cash
Accounts Receivable
Inventories
Total Current Assets
Land
Buildings and Equipment
Accumulated Deprecation
Total Fixed Assets
Total Assets
2004
2003
4,000
16,000
42,500
9,000
12,500
29,000
$
62,500.00
26,000
100,000
-38,000
$
88,000.00
$
150,500.00
$
50,500.00
20,000
70,000
-28,000
$
62,000.00
$
112,500.00
Liabilities and Owner's Equity
Accounts Payable
Short-term Bank Notes
Total Current Liabilities
Long-term Debt
Common Stock
Retained Earnings
Total Liabilities and Owner's
Equity
22,298
47,000
$
69,298.00
22,950
31,500
26,752
$
150,500.00
10,500
17,000
$
27,500.00
28,750
31,500
24,750
$
112,500.00
Use the percent of sales method and the following assumptions:
1. Sales in FY 2003 will be $141,736
2. The tax rate will be 40%
3. Each item which changes with sales will be the five-years average percentage of
sales
a. What is the discretionary financing needed in 2003? Is this a surplus or deficit?
b. Create a chart of Cash vs. Sales and add a linier trend line. Does there appear to
be a consistent trend in this relationship?