Forecasting Pro Forma Financial Statements Prepare a pro forma income statement and balance sheet for Webb Enterprises, where revenues are expected to grow by 20% in 2015 ~ 2017. Make the following assumptions in making your forecast.

• The income statement expenses are a constant percentage of revenues except for interest, which is charged at 5% of previous interest-bearing borrowings, and taxes, which equal 40% of earnings before taxes.
• The cash and marketable securities balance remain equal to $500, and the remaining current asset accounts increase in proportion to revenues.
• Net property, plant, and equipment increase in proportion to the increase in revenues.
• Depreciation will be estimated as 1% of sales.
• Accounts payable increases in proportion to firm revenues.
• Dividend of 400 are paid and will remain the same.
• Owners equity increases by the amount of firm net income minus dividend.
• Long-term debt remains unchanged, and short-term debt changes in an amount that balances the balance sheet.

Check the formula against the results for 2016.

Replicate Solve 0.333 b-1 b-2 0.333 0.267 0.333 0.267 0.267 b-3 0.017 b-4 b-5 b-6 cogs / sales ratio operating expenses / sales cash / sales account receivable / sales inventory / sales net PPE / sales account payable / sales depreciation / sales 0.017 0.200 0.317 0.017 0.200 0.317 0.567 0.200 0.317 0.567 0.240 b-7 0.240 0.567 0.240 0.010 b-8 0.010 0.010 Replicate Solve 0.333 b-1 b-2 0.333 0.267 0.333 0.267 0.267 b-3 0.017 b-4 b-5 b-6 cogs / sales ratio operating expenses / sales cash / sales account receivable / sales inventory / sales net PPE / sales account payable / sales depreciation / sales 0.017 0.200 0.317 0.017 0.200 0.317 0.567 0.200 0.317 0.567 0.240 b-7 0.240 0.567 0.240 0.010 b-8 0.010 0.010