Prepare a percent of sales forecast for Dynamite for 2022 using the 2021 forecast to estimate the percentages. The CFO anticipates sales to be $220,000,000 in 2022. There will be no common stock issued. Dividends will be 50% of net income. The CFO is comfortable issuing long-term debt to finance any needs. The 2021 forecast in thousands of dollars is below.
Required:
- Prepare a percentage of sales forecast for Dynamite for 2022 including the income statement and balance sheet.
- Calculate the current ratio and long-term debt to equity ratio for 2021 and 2022.
- Do the 2022 results in the forecast meet expectations in covenants and goals?
Forecasting:
2021
sales 200,000
cogs -80,000
fixed cogs -20,000
other fixed – 58,000
EBIT 42,000
Interest -2000
EBT 40,000
Taxes -20,000
net income 20,000
cash 10,700
accts receivable: 49,300
inventory: 15,000
Fixed assets: 150,000
225,000
accts pay: 15,000
long term debt: 40,000
common stock: 100,000
retained earnings: 70,000
225,000
