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Percentage of Sales method for Apple Computer

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The attached selected financial statements for Apple Computer are taken from the company's SEC filings. Answer questions 1 and 2 as follows based on this 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 +20% annual revenue growth in 2000? Determine the target revenue figure, and explain why you do or do not feel that the company can hit this target.

Next, consider Apple's Consolidated Statement of Operations for the year ended September 25, 1999 as shown in the attachment and answer questions 3 and 4.

3. Use the Percentage Sales Method and a 20% increase in sales to forecast Apples' Consolidated Statement of Operations for the period September 26, 1999 through September 25, 2000. Assume a 15% tax rate and restructuring costs of 1% of the new sales figure.
4. Discuss your results from question number #3. What assumptions have you made? Do any of your assumptions seem unreasonable?

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The solution explains how to calculate the sales growth percentage and apply the percentage of sales method to make a proforma income statement

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