Problem #1: Proforma Statements Prepare a common size income statement given the following information:

Revenues = $100,000

COGS = $43,000

SG&A = $22,000

Interest Owed = $5,000

Tax Rate = 40%

Problem #2: Proforma Statements

Prepare a pro forma income statement from the data and common size income statement from #1, assuming that the sales will grow by 5% and all expenses but interest and taxes will scale with sales.

1, Use your plan of action to solve each problem, clearly outlining the procedures used, providing a concise explanation of each step, labeling relevant formulas, and showing worked out calculations and complete solutions. You may use an Excel spreadsheet or a calculator to help you perform the necessary calculations, but all corresponding work must be shown completely.

2. Answer all questions posed in the problem; if applicable, analyze and evaluate your results and provide a contextual explanation of the solutions you obtained.

3. Review your calculations and solutions and make sure that an external viewer would be able to follow your methodology and make sense of your calculations and corresponding explanations. Make certain that you have completed all steps of each problem. F