VARIO:

You invented "Durs-Clear windows" that never need washing! Nothing sticks to them - not pollution, pollen, dirt, dust, bird droppings, fingerprints, nothing. You've invested all your own savings, your parents' savings, and some of your friends' savings as well into the R&D, production, and start-up of your business. It's been three years since you started selling your windows primarily to single-family homeowners, but now apartment building contractors across the nation have been requesting your windows. Unfortunately, you're already operating at full capacity. It's time to make the switch from single-family homes to commercial buildings, but to do so requires a large infusion of funding for expansion. You need more of everything: space, equipment, employees, etc.

The following 2 Notes apply!

NOTE 1: You must show All your work. Ether your computations ure in the cell behind your result, or you must ploce them out to the right on the Forecouted Finuncial tab. you choose to show your work out to the right. show all steps and lobel your wurk cleorly so it can be understood.

NOTE 2: Do not round computations until you have found your finol answer. Then, round your result to the nearest dollar. No pennies!

G

It's currently January 1, 2023, and you'll be going on Shark Tank in 2 weeks. Using the information below, create your 5-year Sales, Cost of Goods Sold (COGS), and Gross Profit forecast for the years 2023-2027.

Information:

1

Actual annual sales in the past:

Actual SALES

2020

$1,200,000

2021

$1,500,000

2022

$1,875,000

Because you feel your most recent sales are the best predictor of luture sales, you weight your sales as

follows: W1 = 0.2 and W2 = 0.8

2

3

Required

You are certain you can get volume discounts on your parts and materials now that your Sales are expected to increase. So, you estimate your COGS will be 52% of Sales, which is less than it has been in the past.

(15 pts: 5 for showing work, 10 for accuracy) Conduct a 2-year weighted moving average to forecast the annual sales for the years 2023-2027. Place your results on the Sales line of the Milestone 1 Sales Forecast tab in the highlighted area.

(HINT: See Week 3 Lesson)

(10 pts: 2 for showing work, & for accuracy) Using the Percent-of-Sales methad, compute Cost of Goods Sold. Then compute Gross Profit. Place your results on Milestone 1 Sales Forecast tab in the highlighted

(HINT: See Week 3 Lesson)

(15 pls: 3 for spelling/grammar, 12 for correct answers) Answer the questions on the Milestone 1

DURA-CLEAR WINDOWS, LLC

Proforma Income Statement

2021

2022

2023

2024

2025

2026

2027

Sales (all on credit)

Cost of Goods Sold

Gross Profit

Selling and Administrative Expense

Rent Expense

Depreciation Expense

Operating profit (EBIT)

Interest expense

Net Income before Taxes

Taxes

Net Income

Shares

Earnings per Share

1,200,000

(800,000)

400,000

1,500,000

(1,040,000)

460,000

1,875,000-

1,875,000

(1,105,000)

770,000