Purchase Solution

External funds needed

Not what you're looking for?

Ask Custom Question

Ma & Pa Kettle's Chili Company have started up a business selling their new chili recipe and they want you to help them with next year's sales forecast. Using the worksheet below, complete Ma & Pa's financial forecast and answer the questions which follow.

To begin with, Ma & Pa are sure sales will grow 50% next year. Assume that is true. Then assume that COGS, Current Assets, and Current Liabilities all vary directly with Sales. Assume that fixed expenses will remain unchanged and that $1,000 worth of new Fixed Assets will be obtained next year. Lastly, the current dividend policy will be continued next year.

Ma & Pa Kettle Chili Company, Inc.
Financial Status and Forecast for 2009

2008 Est for 2009

Sales $10,000 ________
COGS 4,000 ________
Gross Profit 6,000 ________
Fixed Expenses 3,000 ________
Before Tax Profit 3,000 ________
Tax @ 33.3333% 1,000 ________
Net Profit $2,000 ________

Dividends $0 ________

Current Assets $25,000 ________
Net Fixed Assets 15,000 ________
Total Assets $40,000 ________

Current Liabilities $17,000 ________
Long term debt 3,000 ________
Common Stock 7,000 ________
Retained Earnings 13,000 ________
Total Liabs & Eq $40,000 ________

Will Ma & Pa be able to get by without any External Funding Required in 2009? .

If not, how much will they need? $________.

Purchase this Solution

Solution Summary

The solution explains how to prepare proforma statements and calculate the external funds needed

Solution Preview

*Please see the attached file for the calculations*.

Will Ma & Pa ...

Purchase this Solution


Free BrainMass Quizzes
Six Sigma for Process Improvement

A high level understanding of Six Sigma and what it is all about. This just gives you a glimpse of Six Sigma which entails more in-depth knowledge of processes and techniques.

SWOT

This quiz will test your understanding of the SWOT analysis, including terms, concepts, uses, advantages, and process.

Introduction to Finance

This quiz test introductory finance topics.

Understanding the Accounting Equation

These 10 questions help a new student of accounting to understand the basic premise of accounting and how it is applied to the business world.

Understanding Management

This quiz will help you understand the dimensions of employee diversity as well as how to manage a culturally diverse workforce.