This is corporate finance question 1- Larime Corp. is forecasting 19X2 near the
ID: 2637338 • Letter: T
Question
This is corporate finance question
1- Larime Corp. is forecasting 19X2 near the end of 19X1. The estimated yearend financial statements and a worksheet for the forecast are shown below.
Larime Corp. Projected Income Statement ($000)
19X 1
$ %
19X2
$ %
Revenue
$245,622
100.0
100.0
COGS
142,461
58.0
______
_____
Gross margin
$103,161
42.0
Expenses
$ 49,124
20.0
EBIT
$ 54,037
22,0
Interest (12%)
9,642
3.9
______
_____
EBT
$ 44,395
18,1
Income tax (43
19X 1
$ %
19X2
$ %
Revenue
$245,622
100.0
100.0
COGS
142,461
58.0
______
_____
Gross margin
$103,161
42.0
Expenses
$ 49,124
20.0
EBIT
$ 54,037
22,0
Interest (12%)
9,642
3.9
______
_____
EBT
$ 44,395
18,1
Income tax (43
Explanation / Answer
Larime Corp.
Income Statement:($000)
Larime Corp.
Balance Sheet ($000)
Working;
Revenue(80% Increase)= 245,622 x 80% = 196,498 + 245,622 = 442,120
COGS increased by 1% = 58 + 1 = 59%
Expenses increase at a rate which is 3/4 of Sales: 80 x 3 / 4 = 60%
Current assets and Current Liabilities are increased by 80% (Proportionately with sales)
Fixed assets= 142,128,000 + 5 million = 147,128,000
Amount($) % Revenue 442,120 100 COGS 260,851 59 Gross Margin 181,269 41 Expenses 78,598 17.78 EBIT 102,671 23.22 Interest (12%) 9,642 2.18 EBT 93,029 21.04 Income Tax 40002 9.04 EAT 53,027 12Related Questions
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