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2. Prepare a projected income statement assuming sales increase by 6% in 2020. 1. Average your vertical analysis percentages

Reply CROP Tom Myers 2/5/20, 12:15 PM Vertical Analysis 2. Prepare a projected income statement assuming sales increase by 6%

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Answer #1

The Balance sheet figures are not shared. Hence, the calculations are done basis the available info.

Oct-16 % of sales Nov-17 % of sales Nov-18 % of sales Nov-19 % of sales Avg % Nov-20 Calculation
Average of Columns D,F,H,J
(i) Net sales 140063 167223 174257 188785 200112.1 188785*1.06
(ii) COGS 84850 60.6% 105637 63.17% 117751 67.57% 127121 67.34% 64.7% 129402.9 200112.1*64.7%
(iii) Gross margin 55213 39.4% 61586 36.83% 56506 32.43% 61664 32.66% 35.3% 70709.22 200112.1*35.3%
(iv) Selling, general and admin expenses 44377 31.7% 48816 29.19% 49929 28.65% 52837 27.99% 29.4% 58791.03 200112.1*29.4%
(v) Gain (loss) on sale of property, plant and equipment 0.0% 58 0.03% 6236 3.58% -290 -0.15% 0.9% 1730.816 200112.1*0.9%
(vi) Income before taxes 10836 7.7% 12828 7.67% 12813 7.35% 8537 4.52% 6.8% 13649.01 200112.1*6.8%
(vii) Provision for (benefit on) income taxes 3066 2.2% 3999 2.39% 6296 3.61% 2053 1.09% 2.3% 4643.085 200112.1*2.3%
(viii) Net income 7770 5.5% 8829 5.28% 6517 3.74% 6484 3.43% 4.5% 9005.922 200112.1*4.5%
Profit margin ratio …………….[(viii)/(i)] 5.55% 5.28% 3.74% 3.43%
Gross profit margin ratio…………[(iii)/(i)] 39.42% 36.83% 32.43% 32.66%
Return on assets Need B/S data
Return on Equity Need B/S data
Inventory Turnover Need B/S data
Days' Sales in Inventory Need B/S data
Receivables Turnover Need B/S data
Days' Sales in Receivables Need B/S data
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