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 #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
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