1.Create a pro forma balance sheet for 1996. Explain how you get each numbers.

2. Use percentage of sales method to estimate funds needed in 1996 using the 1995 percentage

3. When offerred 2/10 net 30, the firm has always taken discount. Does this make financial sense?

4. Construct sources and uses statement for 1996. Make sure to analyze short tem sources and short term uses, long term sources and long term uses

Thanks in advance! I need help understanding to calculate each questions for future reference.

CASE 1 2 TOPEKA ADHESIVES (I) FINANCIAL FORECASTING Karen and Elizabeth Whatley are twins. Their mother teaches Physics at a mid- western university and their father runs a successful engineering firm. Not sur- prisingly, they are quite gifted at math and science, and they've displayed these talents in numerous ways over the years. For example, they have won a num- ber of state science fairs, achieved near-perfect math SAT scores, and graduated Summa Cum Laude with Chemistry degrees from California Institute of Technology. After graduating college they took jobs with a major chemical com- pany, though their long-term goal was to open their own firm. The Whatleys completed a number of evening courses to increase their business skills. In their spare time the sisters loved to experiment and developed two relatively low- cost adhesives: a glue and a tape They fulfilled a dream seven years ago when-with modest capital but con- tracts with a number of regional building supply stores-they formed Topeka Adhesives. The firm's products were top-notch and the company finished in the black its very first year, although the sisters were not entirely comfortable with the financial side of the business. A MARKETING DECISION About 12 months ago the partners concluded that Topeka's products were "un- derappreciated" and that "sales could-and should-be substantially higher They fired an unproductive salesperson and, more importantly, made a key mar- keting decision. The twins decided to reduce Topeka's advertising in trade journals and use the money saved to attend more trade shows. They reasoned that trade shows are a relatively inexpensive way to display the company's products and are an opportunity to meet major corporate buyers face to face. That is precisely what happened. The firm's exhibits were impressive, and the Whatleys made important