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    Percentage of sales method

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    For selected financial statements for Micro Chip Computer Corporation click here . Answer questions 1 and 2 below based on the financial data.

    Determine the year-to-year percentage annual growth in total net sales.
    Based only on your answers to question #1, do you think the company will hit its sales goal of +10% annual revenue growth in 2009? Determine the target revenue figure, and explain why you do or do not feel that the company can hit this target.
    Next, consider Micro Chip's Consolidated Statement of Operations for the year ended September 25, 2008 (click here to download) and answer questions 1 and 2.

    Use the Percentage Sales Method and a 20% increase in sales to forecast Micro Chip's Consolidated Statement of Operations for the period September 26, 2007 through September 25, 2008. Assume a 15% tax rate and restructuring costs of 2% of the new sales figure.
    Discuss your results from question number #1. What assumptions have you made? Do any of your assumptions seem unreasonable?
    To receive full credit on this assignment, please show all work, including formulae and calculations used to arrive at financial values. Students who are using Excel must provide an adequate explanation of the methodology used to arrive at that answer.

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    Solution Summary

    The solution explains how to make a proforma income statement using the percentage of sales method