Prepare a 5-year forecast of Net Income using the data provided for the base year and the following anticipated annual changes;
* Annual growth in sales is forecasted at 12% per year
* Annual growth in operating expenses projected at 15% per year - EXCEPT for Salaries and wages which are forecast to grow at only 5%.
* Payroll taxes are forecast to be 18% of salaries
* Benefits are forecast to be 28% of salaries
You have been provided with the beginnings of a forecasting template - you will be required to complete the template using EXCEL formula, which can be based on those already entered. The formula should calculate annual forecasted amounts which will then feed into the calculation of the 5-year cumulative totals.
These are the steps:
1) First find out Sales for five years. Next year sales= Previous year sales*(1+growth)
2) In the ...
Solution explains of how to do a 5-year forecast of Net Income