Develop a pro forma income statement, using the following assumptions at a minimum:

• Sales/revenues will decrease by 10% due to the impact of new tariffs on imports to other countries (for sales/manufacturing firms) or increasing competition (for other types of firms).
• Cost of Goods Sold (Cost of Sales) will increase by 5% due to increased costs from overseas suppliers due to tariffs on some imported materials (only applies to sales/manufacturing firms).
• Other expenses will increase by 3% due to inflation and wages increase.
• Interest expense will rise 10% due to increasing interest rates on short-term loans.
• Taxes will decrease by 35% due to new tax laws.
• What is the overall effect of these changes in planning assumptions on the organizations financial performance (net income/profit) for next year?
• As a leader of this organization, what are some possible actions that could be taken now to mitigate and/or take advantage of the effects of these anticipated changes?

The Sporate M \\ditio rate Editi\May Pere Velle le Finale (El ay 2017. I Ivo Well2 Finance Line IT Time December 2014 2013 2015 Sales a $55.9 -COGS $52.7 $21.2 $55.4 $20.7 $20.3 Gross $35.6 $34.7 $10.6 $8.1 - + SG&A + Others $11.5 $8.1 $0.6 $12.1 $7.9 $0.6 $0.5 $19.2 $20.3 $20.7 $12.3 $15.3 $14.0 $0.3 $0.5 $0.2 = Operating Incomeh + Net Interest Income /Adjustments' Income Before Taxi Corporate Income Taxk Net Income After Tax th portid Maya2 Nelca zce (4) $12.6 $15.8 $14.2 $2.8 $3.0 $4.1 $10.1 $12.1 $11.7 17 a. Grows by 3% in 2016 b. Intuition c. Calculated d. Grows by $0.9 billion e. Remains similar f. Remains similar g. Calculated h. Calculated i. Remains similar j. Calculated k. 20% Tax Rate, as in 2015 1. Calculated Other CF from te co Cash Flow Statement Time December 2013 2014 2015 2014\Ed) Ive $10.1 $8.0 $3.2 $12.1 $8.5 $0.2 Net Income a Depreciation b All Others (incl W/C) Total Operating Activityd Capital Expenditures Investments $11.7 $8.7 -$1.1 $20.8 $20.4 $19.0 IN -$10.1 -$10.7 II + + -$7.3 -$3.8 -$3.5 $1.8 -$1.5 -$2.4 +$1.6 Ova $18.1 -$9.9 -$8.2 Operating Plus Investing $2.6 $11.5 $11.0 C vious ye a. Transfer from IS (Table 21.2) b. Eyeballed (Long-Term) c. Intuition ?! d. Calculated e. Similar to previous years f. Altera Acquisition g. Similar to previous years h. Calculated i. Calculated