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Micro Chip Computer Corporation: Financial Management

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See the attached file for the selected financial statements for Micro Chip Computer Corporation. 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?

Please show all steps.

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Solution Summary

This solution is provided in the attached Excel file. Please note in the assignment there is only 1 file with the financials for the year ended September 2008. There should be another file with financials from 2004 to 2007. I've included the numbers for all the missing years.

Solution provided by:
Sonia Agarwal, CA
Education
  • Chartered Accountant (Equivalent to CPA in US), Institute of Charted Accountants of India
  • Bachelor of Commerce, West Bengal University
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