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    Percentage of Sales and Ratios

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    For the attached financial statements for Micro Chip Computer Corporation
    I need to answer questions 1 and 2 below based on the financial data.

    1. Determine the year-to-year percentage annual growth in total net sales.
    2. Based only on your answers to question #1, do you think the company will hit its sales goal of +10% annual revenue growth in 2005? Determine the target revenue figure, and explain why you do or do not feel that the company can hit this target.

    Consider Micro Chip's Consolidated Statement of Operations for the year ended September 25, 2004 I need to answer questions 1 and 2.
    1. Use the Percentage Sales Method and a 20% increase in sales to forecast Micro Chip's Consolidated Statement of Operations for the period September 26, 2003 through September 25, 2004. Assume a 15% tax rate and restructuring costs of 2% of the new sales figure.
    2. Discuss your results from question number #1. What assumptions have you made? Do any of your assumptions seem unreasonable?

    Can you please show me all the formulas and calculations used to arrive at financial values. Can you please show me how to do this in Excel, and how your arrived at your answer.

    Part 2 -
    Using the annual information found in the third attachment. Calculate the following asset activity ratios for the end of 2005:
    Average Collection Period
    Inventory Turnover
    Total Asset Turnover
    Please again can you show me, tell me how you arrived at your financial values.

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    https://brainmass.com/business/business-management/percentage-of-sales-and-ratios-51757

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    Solution Preview

    1. Determine the year-to-year percentage annual growth in total net sales.

    The year-to-year percentage growth is found by the formula - (Year 2 sales- Year 1 sales)/Year 1 sales. This as a percentage gives us the percentage annual growth.

    2. Based only on your answers to question #1, do you think the company will hit its sales goal of +10% annual revenue growth in 2005? Determine the target revenue figure, and explain why you do or do not feel that the company can hit this target.

    First we find the sales with 10% annual growth. The value comes to $9,167.4. The question is will the target be met. For this, we need to look at the growth rates of the past. The growth rate is 25% in 2004 but it was negative in ...

    Solution Summary

    The solution explains how to apply the percentage of sales method and also explains the calculation of Average Collection Period, Inventory Turnover and Total Asset Turnover

    $2.19

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