Explore BrainMass

Explore BrainMass

    Pro forma balance sheet, income statement, and ratios

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    I need assistance formulating pro forma financial documents and calculating NPV IRR and payback periods please provide instruction using Microsoft Excel.

    1)Given the information below, utilize the percent of sales method to prepare a pro forma balance sheet, income statement, and selected ratios.

    1.Sales will increase by 25% next year.
    2.The following balance sheet items will increase in direct relation to sales:
    b.Accounts Receivable
    d.Fixed Assets
    e.Accounts Payable
    3.Management forecasts that Notes payable will need to increase by $1,000,000 to support the increase in sales.
    4.Management forecasts that Earnings after Taxes will be $2,750,000 next year.
    5.The company intends to pay the same amount of dividends next year.

    See attachment

    2)Stephen Company currently has two mutually exclusive projects under consideration:
    Year Project A Project B
    0 -30,000 -60,000
    1 10,000 20,000
    2 10,000 20,000
    3 10,000 20,000
    4 10,000 20,000
    5 10,000 20,000

    1. Calculate the following values for each project using the time value tables: (Assume a 14%
    discount rate)
    ? NPV
    ? IRR
    ? Payback period

    2. Which project would you choose? Why would you choose it?

    © BrainMass Inc. brainmass.com October 9, 2019, 11:49 pm ad1c9bdddf


    Solution Summary

    The solution explains how to prepare proforma financial statements and calculate ratios