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Home Safety Inc - pro forma statements

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Need help in creating a pro forma set of financial statements (income statements, balance sheet, and statement of cash flows) based on a 25% increase in profitability and other criteria presented in the case.

Case study: Home Safety Inc. Located on page 45-the end of the saved PDF file.

then:

How much revenue growth is needed to achieve the desired profitability?

b) based on your review of the pro forma finacial statements, what general observation and recommendations can you make

c) do you believe that these proforma statements will meet the company's overall goals and objectives? why or why not?

d) what other assumptions and considerations are necessary for this plan to work.

Use excel to create spreadsheets of actual statements. include the statements in the report.

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Solution Summary

Calculations in excel file and case answers in a word file (440 words). The expert examines the pro forma financial statements.

Solution Preview

Please see the attached files.

HOME SAFETY INC.
a) the answer to this is presented in the excel file wherein the trend maintained between sales and current assets, non current assets, current liabilities is maintained. Further the increase in administration expense and advertising expense are maintained, as required.
b) On the basis of calculation performed to ensure an increase in net income of 25% sales should be increased by 49%, given the change in administrative and advertising expense. On the basis of given information it can be said that as Home Safety has achieved 100% capacity it is prudent on the part of the ...

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  • MBA (IP), International Center for Internationa Business
  • BBA, University of Rajasthan
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