Franco$-$American Imports $-$ Pro$-$Forma Statements

Franco$-$American Imports Franco$-$American Imports

Income Statement Balance Sheet

$(000$s$)(000$s$)$

Actual Projected Actual Projected Actual Projected

$202320242023202420232024$

Sales $5,0006,000$ Assets Liabilities & Equity

COGS $2,7503,750$ Cash $200400$ Accounts Payable $700$

Marketable securities $275275$ Taxes Payable $95$

Gross Margin $2,2502,250$ Accounts Receivable $625$ Notes Payable $200$

Inventories $500$ Other current Liabilities $5$

Operating Expenses $8501,100$ Total current assets $1,600$ Total Current Liabilities $1,000$

Operating Profits $1,4001,150$ Net Fixed Assets $1,400$ Long$-$Term Debt $500$

Interest Expense $200200$ Financing Required

Profit Before Tax $1,200950$ Total Assets $3,000$ Common Stock $125$

Tax @ $40\%480380$ Retained Earnings $1,375$

Net profit after tax $720570$

Total Liabilities & Equity $3,000$

Memo: Cash Dividends $288$

Assumptions for $2024($all numbers in $(000$s$)$:

Sales are projected to increase by $20\%$ over $2023$

COGS includes $$1,000$ in fixed costs

Operating Expenses include $$250$ in fixed costs

The firm will pay cash dividends of $40\%$ of net profits after tax

Cash will double

Due to a large purchase, inventory turnover will decline to $3\mathrm{.}1$X

Marketable securities$,$ notes payable, ling$-$term debt and common stock will remain unchanged.

A$/$R days and A$/$P days are expected to remain the same as $2023$

Other current liabilities will change in direct response to the change in sales

A new computer system costing $$356$ will be purchased during the year

Total depreciation expense for the year will be $$110$

Assignment