Financial Analysis of Modern Electronics Ltd

Modern Electronics Ltd$,$ a leading electronics manufacturer, has provided its profit & loss

account for the fiscal years ending March $2017$ and March $2018.$ We will use this data to

forecast the company's financial performance for the year ending March $2019$ using the percent

of sales method.

Profit & Loss Account $($in Rs$.$ crore$)$

Particulars Mar $\text{'}17$ Mar $\text{'}18$

Net Sales $800890$

Cost of Goods Sold $610680$

Gross Profit $190210$

Operating Profit $2029$

Profit Before Tax $($PBT$)1828$

Particulars Mar $\text{'}17$ Mar $\text{'}18$

Profit After Tax $($PAT$)1118$

Discussion Questions:

Forecast for $2019($based on percent of sales method$)$

$1.$ Net Sales Forecast: Estimate the projected net sales for the year ending March $2019$

based on a growth rate.

$2.$ Cost of Goods Sold $($COGS$)$: Calculate the estimated COGS as a percentage of

projected net sales for $2019.$

$3.$ Operating Profit Forecast: Determine the expected operating profit margin as a

percentage of projected net sales.

$4.$ Profit Before Tax $($PBT$)$ Forecast: Estimate the projected PBT margin based on

historical trends.

$5.$ Profit After Tax $($PAT$)$ Forecast: Finally, forecast the expected PAT for the fiscal

year ending March $2019$ based on the above assumptions.