American Intercontinental University Nicholas Goshay FINA 310 Determine the year-to-year percentage annual growth in total net sales. 2008 2007 2006 2005 2004 Net Sales $ 8,334 $ 6,141 $ 9,181 $ 11,933 $ 11,062 % 35.71% -33.
11% -23.06% 7.87% 0% (New Year Sales – Previous YearSales / Previous Year Sales) Based on your answers to question #1, do you think the company achieved its sales goal of +10% annual revenue growths in 2009? Determine the target revenue figure, and explain why you do or do not feel that the company hit its target. It is possible they can achieve the+10% growth for 2009, but there is an inconsistency in sales. There is a growth in sales of 35.
71% in salesgrowth in 2008, so there is a possibility that Micro Chip Computer Corporationcan reach its goal. Target Revenue: 8,334*10% = 9,167 Use the Percentage Sales Method and a 30% increase in sales to forecast Micro Chip’s Consolidated Statement of Operations for the period of September 26, 2008 through September 25, 2009. Assume a 15% tax rate and restructuring costs of 5% of the new sales figure. Totals Sales $ 8,334.00 8,334*(1+.30) 65.
49% $ 10,834.20 Cost of Sales $ 5,458.00 5,458*100/8,334 34.51% 10,834.
20*65.49% $ 7,095.32 Gross Margin $ 2,876.00 2,876*100/8,334 34.51% 10,834.20*34.51% $ 3,738.88 Operating expenses: R & D $ 525.
00 525*100/8,334 6.30% 10,834.20*6.
30% $ 682.55 Selling, General, and Administrative $ 691.00 691*100/8,334 8.29% 10,834.20*8.29% $ 898.15 In?process R & D $ – 0 0.00% 0 $ – Restructuring costs $ – 0 5.
00% 10,834.20*5% $ 541.71 Total Operating Exp $ 1,216.00 682.55+898.15+541.71 $ 2,122.41 Operating income $ 1,660.
00 3738.88-2,122.41 $ 1,616.47 Total interest and other Income net $ 194.00 194*100/8,334 2.32% 10,834.20*2.32% $ 251.
35 Income before provision for Income taxes $ 1,854.00 1,616.47+251.35 $ 1,867.
82 Provision for income Taxes (15%) $ 278.10 1,867.82*15% $ 280.17 Net income $ 1,575.00 1,867.82-280.
17 $ 1,587.65 Discuss your results from question number #1. What assumptions have you made? Do any of your assumptions seem unreasonable? Using the percentage sales method, thesales were increased by 30%; the ending result of the net income was increased to$1587.
65 from previous year, which is a .96% increase. The percentage ofsales method would not be unreasonable for cost of goods sold or sellingexpenses. However, it would be unreasonable using these assumptions forinterest income since there are unrelated. So all in all just considering this specific information I would have tosay that these assumptions solely based on sale amounts are to be unreasonable.
