Need help on course: Financial Statement Analysis Homework Assignment

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Using the PowerPoint Lecture \"Creating Projections,\" create a new set of projections for Years X E and X +1 E. For this Homework Assignment, your work should be completed on the Week 7 Homework Worksheet (an Excel File - Provided as a separate file in this Week 7 Content Folder). Please make sure you put your name in the appropriate box on the worksheet! All historical information remains the same (through Year X-1). Use this new set of assumptions: Revenue growth: 30% Year X E 30% Year X + 1 E 1% improvement in Gross Margin for Year X E (from year X-1). No further change in the Gross Margin for Year X+1. 1% improvement in Selling in Year X E. Same level in Year X+1 E. G&A remains constant on a common size basis. $10,000 increase in R&D in X E. Same R&D level in Year X+1 E. Basic Shares outstanding - 3,000,000. A new section of the existing plant is constructed for $300,000. This new construction is depreciated over 30 years using the straight line method. All other depreciation remains the same for the years X E and X+1 E. The plant is financed with a $300,000 10 year bond with a fixed interest payment of 10% annually. The Company, for the first time, grants 500,000 options to various members of management with an exercise price of $1.00. These options are granted on the first day of Year X E. There are no other options, warrants or convertible securities. The average stock price for Year X E and Year X+1 E is projected to be $5.00. All other interest payments, interest income and tax rates remain the same. Your Name Here Revenue Cost of Goods Sold Gross Profit $ Year X - 1 1,440,000 921,600 518,400 Year X E 100.0% 64.0% 36.0% Selling General and Administrative Research and Development Depreciation and Amortization Total Operating Expenses 158,400 108,000 40,000 30,000 336,400 2.1% 23.4% Operating Income 182,000 12.6% Interest costs Interest income 5,000 4,000 0.3% 0.3% Pre-Tax Income Tax (35%) Net Income $ 181,000 63,350 117,650 12.6% 4.4% 8.2% $ 0.04 Earnings Per Share - Basic Earnings Per Share - Diluted Shares Outstanding Shares For Diluted A Options Ex Price Stock Price Proceeds New Share structure Buy Back Shares Shares for Diluted Calculations Revenue Gross Margin Depreciation and Amortization Operating Income Operating Margin Interest Expense Net Income Basic EPS 11.0% 7.5% 2.8% 3,000,000 $ $ $ 500,000 1.00 5.00 500,000 3,500,000 100,000 3,400,000 $ Year X E - $ $ - Diluted EPS Shares used to calculate Diluted EPS $ - Year X + 1 E Year X + 1 E $ - $ $ - $