Prepare proforma forecasts of financial statements of Simple, Inc for two years, 2021 and 2022. What...

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Prepare proforma forecasts of financial statements of Simple, Inc for two years, 2021 and 2022. What are the company's forecasted Net Earnings (profit/loss after tax) and additional financing requirements (overdrafts) in 2021 and in 2022? Assumptions: in 2021 and 2022, sales will grow at 10% per year, CGS will equal 42% of sales, SGA will equal 48% of sales, DRO and DPO will be maintained at 30 days, while DSI will be maintained at 100 days. All other accounts will be maintained at ratios to sales similar to those during 2020. TO FORECAST TO FORECAST 2022 2021 Financial Statements (in $ millions) Fiscal Year Ended Dec. 31 2017 2018 2019 2020 ($) (% sales) ($) (% sales) ($) (% sales Past data Assumptions estimated Income Statement Turnover Cost of sales Gross profit 303.7 100.0 330.1 100.0 374.1 100.0 13.33% 127.7 42.0 130.9 39.7 149.0 39.8 % of sales 15% 39.80% 430.2 171.2 176.0 58.0 199.2 60.3 225.1 60.2 mechanical 259.0 Operating expenses -excluding exceptional co 151.4 49.9 166.2 50.3 195.7 52.3% of sales 50% 216.4 - exceptional costs 4.5 1.5 0.0 0.0 11.2 3.0 unusual 0% 0 Restructuring costs 16.6 5.5 2.7 0.8 1.0 0.3 unusual 0% 0 Net interest expense 0.1 0.0 1.5 0.5 4.4 1.2 interest rate 9% 5.2 Profit before tax 3.4 1.1 28.8 8.7 12.8 3.4 mechanical 37.4 Tax expense 8.0 2.6 10.4 3.2 3.5 0.9 pre-tax tax ra 27.34% 10.2 Profit/(loss) after tax (4.6) -1.5 18.4 5.6 9.3 2.5 mechanical 27.2 Ordinary dividends 10.9 3.6 10.9 3.3 10.9 2.9 constant Profit/(loss) retained (15.5) -5.1 7.5 2.3 (1.6) -0.4 mechanical 10.9 16.3 sales growth 8.69% 13.33% interest rate, approximate tax rate 9.13% 27.34% Fiscal Year Ended Dec. 31 2017 2018 2019 Balance Sheet ($) (% sales) ($) (% sales) ($) (% sales) Assets Cash 34.0 11.2 19.2 5.8 13.7 3.7 min level 13.7 Excess cash (PLUG) PLUG 0 Accounts receivable 27.8 9.2 30.3 9.2 30.3 8.1 DRO 29.6 34.8 Inventories 38.6 12.7 44.7 13.5 51.3 13.7 DSI 125.7 59.0 Other current assets 12.5 4.1 15.6 4.7 17.5 4.7% of sales 4.68% 20.1 Net fixed assets 87.8 28.9 104.7 31.7 110.6 29.6 % of sales 29.56% 127.2 Other assets 0.0 0.0 6.0 1.8 6.7 Total assets 200.7 66.1 220.5 66.8 230.1 1.8% of sales 61.5 mechanical 1.79% 7.7 262.5 Liabilities and equity Accounts payable 13.0 4.3 20.5 6.2 10.7 2.9 DPO 26.2 12.3 Taxes payable 11.3 3.7 11.7 3.5 7.1 1.9% of sales 1.90% 8.2 Accruals 10.8 3.6 15.6 4.7 11.5 3.1 % of sales 3.07% 13.2 Overdrafts (PLUG) 0.0 0.0 0.3 0.1 0.7 0.2 PLUG 9.1 Other current liabilities 21.6 7.1 13.3 4.0 16.9 4.5% of sales 4.52% 19.4 Long-term liabilities 28.0 9.2 36.7 11.1 61.2 16.4 DEBT constant 61.9 Other liabilities 1.7 0.6 1.0 0.3 0.4 0.1% of sales 0.11% 0.5 Shareholders' equity 114.3 37.6 121.4 36.8 121.6 32.5=last year's + IS ret earn 137.9 Total liabs. and equity 200.7 66.1 220.5 66.8 230.1 61.5 mechanical 262.5 base case 1. Net earnings 27.2 27.0949 2. Overdrafts 9.1 9.3 difference 9.1 TA>TLE TA Prepare proforma forecasts of financial statements of Simple, Inc for two years, 2021 and 2022. What are the company's forecasted Net Earnings (profit/loss after tax) and additional financing requirements (overdrafts) in 2021 and in 2022? Assumptions: in 2021 and 2022, sales will grow at 10% per year, CGS will equal 42% of sales, SGA will equal 48% of sales, DRO and DPO will be maintained at 30 days, while DSI will be maintained at 100 days. All other accounts will be maintained at ratios to sales similar to those during 2020. TO FORECAST TO FORECAST 2022 2021 Financial Statements (in $ millions) Fiscal Year Ended Dec. 31 2017 2018 2019 2020 ($) (% sales) ($) (% sales) ($) (% sales Past data Assumptions estimated Income Statement Turnover Cost of sales Gross profit 303.7 100.0 330.1 100.0 374.1 100.0 13.33% 127.7 42.0 130.9 39.7 149.0 39.8 % of sales 15% 39.80% 430.2 171.2 176.0 58.0 199.2 60.3 225.1 60.2 mechanical 259.0 Operating expenses -excluding exceptional co 151.4 49.9 166.2 50.3 195.7 52.3% of sales 50% 216.4 - exceptional costs 4.5 1.5 0.0 0.0 11.2 3.0 unusual 0% 0 Restructuring costs 16.6 5.5 2.7 0.8 1.0 0.3 unusual 0% 0 Net interest expense 0.1 0.0 1.5 0.5 4.4 1.2 interest rate 9% 5.2 Profit before tax 3.4 1.1 28.8 8.7 12.8 3.4 mechanical 37.4 Tax expense 8.0 2.6 10.4 3.2 3.5 0.9 pre-tax tax ra 27.34% 10.2 Profit/(loss) after tax (4.6) -1.5 18.4 5.6 9.3 2.5 mechanical 27.2 Ordinary dividends 10.9 3.6 10.9 3.3 10.9 2.9 constant Profit/(loss) retained (15.5) -5.1 7.5 2.3 (1.6) -0.4 mechanical 10.9 16.3 sales growth 8.69% 13.33% interest rate, approximate tax rate 9.13% 27.34% Fiscal Year Ended Dec. 31 2017 2018 2019 Balance Sheet ($) (% sales) ($) (% sales) ($) (% sales) Assets Cash 34.0 11.2 19.2 5.8 13.7 3.7 min level 13.7 Excess cash (PLUG) PLUG 0 Accounts receivable 27.8 9.2 30.3 9.2 30.3 8.1 DRO 29.6 34.8 Inventories 38.6 12.7 44.7 13.5 51.3 13.7 DSI 125.7 59.0 Other current assets 12.5 4.1 15.6 4.7 17.5 4.7% of sales 4.68% 20.1 Net fixed assets 87.8 28.9 104.7 31.7 110.6 29.6 % of sales 29.56% 127.2 Other assets 0.0 0.0 6.0 1.8 6.7 Total assets 200.7 66.1 220.5 66.8 230.1 1.8% of sales 61.5 mechanical 1.79% 7.7 262.5 Liabilities and equity Accounts payable 13.0 4.3 20.5 6.2 10.7 2.9 DPO 26.2 12.3 Taxes payable 11.3 3.7 11.7 3.5 7.1 1.9% of sales 1.90% 8.2 Accruals 10.8 3.6 15.6 4.7 11.5 3.1 % of sales 3.07% 13.2 Overdrafts (PLUG) 0.0 0.0 0.3 0.1 0.7 0.2 PLUG 9.1 Other current liabilities 21.6 7.1 13.3 4.0 16.9 4.5% of sales 4.52% 19.4 Long-term liabilities 28.0 9.2 36.7 11.1 61.2 16.4 DEBT constant 61.9 Other liabilities 1.7 0.6 1.0 0.3 0.4 0.1% of sales 0.11% 0.5 Shareholders' equity 114.3 37.6 121.4 36.8 121.6 32.5=last year's + IS ret earn 137.9 Total liabs. and equity 200.7 66.1 220.5 66.8 230.1 61.5 mechanical 262.5 base case 1. Net earnings 27.2 27.0949 2. Overdrafts 9.1 9.3 difference 9.1 TA>TLE TA