Provide projected Income Statement, Retained Earnings statement and Projected Balance Sheet on the right using the following assumptions: 1 sales growth is 110%; sales return, as a percentage of sales revenue, does not change 2 Gross profit margin is the same as 2014 profit margin 3 Depreciation expense/Prior PPE (gross) = 4% 4 Interest expense/Prior year long-term debt = 6% 5 All other expenses (insurance, supplies, utilities, bad debt and rent) grow at the same rate as sales growth. 6 Income tax expense/ pre-tax income = 12% 7 A/R turnover is the same as that calculated for year 2014 8 A/P turnover is the same as that calculated for year 2014 9 Inventory turnover is the same as that calculated for year 2014 10 There is no change in current assets other than Cash, A/R and inventory 11 Capital expenditure/Sales =7% 12 Assume no change in long-term assets except for PP&E. 13 Assume no change in all liabilities, excpet for A/P 14 Assume no change in shareholders' Equity except for Retained Earnings 15 No dividend is paid on common stock and 5% dividend is paid on preferred stock
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