I have no clue how to go about this question. You are the CFO for Fast company,

Question

I have no clue how to go about this question.

You are the CFO for Fast company, a rapidly growing producre of technology products. The CEO has requested that you prepare projections for 2019, including an Income Statement, Balance Sheet and Cash flow. Due to the high growth and investment required during this phase, the company has had to raise additional capital in each of the last several years. How much capital must be raised based on the plan input. prepare a cash flow projection(use format in F/S Mechanics Spreadsheet For extra credit, I CEO expects revenue growth to slow to 50% increase over 2018 2 Do to volume increases, cost of goods sold will decrease to 57% in 2019 3 Other expense levels will decrease to 37% of sales due to efficiencies of scale 4 Fast Co expects to purchase and install $1,000 worth of factory equipment 5Your Fixed Asset accountant has estimated 2018 depreciation to increase to 700k 6 The Co's Treasurer believes that we must maintain a minimum cash balance of $200k 7 The finance teams believe that the following accounts will continue to vary with sales(same %): Accounts Receivable Inventory Other Current Assets Accounts Payable Other Current Liabilities 8 Short term Notes will remain at 300k 7 Make any other reasonable assumptions(but identify them)

Explanation / Answer

2018 projected 2019 % of sales Income Statement: A Sales          6,000           9,000 100% 1.(6000*1.5) B COGS          3,600           5,130 57% 2.(9000*0.57) C=A-B Margin          2,400           3,870 43% D Depreciation              400              700 8% 5.Depreciation =700 E Other expenses          2,460           3,330 37% 3.(0.37*9000) F=C-D-E EBIT           (460)            (160) -2% G Interest expense                  5 5 0% H=F-G Profit before tax           (465)            (165) -2% I Tax expense              (98)              (35) 0% J=H-I Net Income           (367)            (130) -1% Dividends                 -   0% Assets J Cash              200 200 2% K Accounts Receivable          1,200           1,800 20% (20% of Sales) L Inventory          1,800           2,700 30% (30% of Sales M Other Current assets              905           1,350 15% (15% of Sales) N=J+K+L+M Total Current Assets          4,105           6,050 67% P PP&E Cost          5,000 5001 56% (5000+1) Q Accumulated depreciation              685           1,385 15% (685+700) R=P-Q Net fixed assets          4,315           3,616 40% S=R+N TotalAssets          8,420           9,666 107% Liabilities & Equity T Accounts payable          1,000           1,530 17% (17% of sales) U Notes Payable              300              300 3% V Other current liabilities          2,000           2,970 33% (33% of sales) W=T+U+V Current Liabilities          3,300           4,800 53% X Long term debt - - 0% Y=W+X Total Liabilities          3,300           4,800 53% Z Shareholders equity          1,146           1,146 13% AA Additionalfinance raised/Required          3,974           3,720 AB=Y+Z+AA Total Liabilities & equities          8,420           9,666 107%

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