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Pro forma Financial Statements

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I need to complete a set of proforma financial statements using the attached mini case study. I also need to answer a few questions about the financial statement. I will attach the case study in adobe. It begins on pg 99 and is about a company Home Safety Inc. the finacial statements need to be done in Microsoft excel. I will also provide some check figures that my teacher provided below.

Mini-Case Study: Home Safety, Inc

2003 est
Net Income $8,230
Total Assets $98,988
Total Liabilities $48,910
Cashflow from Operating Activities ($17,323)
Cashflow from Investing Activities ($15,998)
Cashflow from Financing Activities $33,736

These are the four questions that need to be answered.

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

2) Based on your review of the pro forma financial statements, what general observations and recommendations can you make?

3) Do you believe that these pro forma statements will meet the company's overall goals and objectives? Why or why not?

4) What other assumptions and considerations are necessary for this plan to work?

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Solution Preview

I am attaching the two files with the details. For the questions, I have put in my thoughts and you may wish to expand on these and add some of yours. If you need any more help, pls do let me know. Many fo the figures are judgemental and based on the check figures provided by you.

The proforma financial statement is in the attached file. The cost of sales is taken as 60% in line with the growth in cost of sales in the previous years. The G&A expenses are based on the number of persons. The per person cost comes to approximately $183 and taking the total number of employees, the figure has been worked out. $183 comes from dividing the total amount in various years by the number of employees as given in the case. For advertising the year on year growth is 100% and the same has been maintained. Depreciation has been calculated by getting the ratio of increase in PPE to the increase in depreciation. This figure comes to 19%. For 2003, the increase in PPE is 15,998. 19% of this is the deprecation. Interest expense is 4.5% of ...

Solution Summary

The solution explains how to prepare proforma financial statements using the example of Home Safety Inc