Vectra Manufacturing

Actual and Pro Forma Income Statements

Prepared Using the Percent-of-Sales Method
For the Years Ended December 31

Sales Revenue
Cost of Goods Sold
Gross Profit Margin
Less: Operating expenses
Operating earnings
Less: Interest expenses
Earnings Before Taxes (EBT)
Taxes (15%)
Net income after tax (NIAT)
Less: Common share dividends (40%)
Reinvested Profits

2008(A)
$100,000
80,000
$20,000
10,000
10,000
1,000
9,000
1,350
7,650
3,060
$4,590

2009(F)
$140,000
112,000
$28,000
14,000
14,000
1,400
12,600
1,890
10,710
4,284
$6,426

=B8*(1.4)
=B9*(1.4)
=C8-C9
=B11*(1.4)
=C10-C11
=B13*(1.4)
=C12-C13
=B15*(1.4)
=C14-C15
=C16*(0.4)
=C16-C17

Vectra Manufacturing
Actual and Pro Forma Balance Sheets
Prepared Using the Percent-of-Sales Method
As at December 31
Assets
Current Assets
Cash
Marketable Securities
Accounts Receivable
Inventory
Total Current Assets
Net Fixed Assets
Total Assets

2008(A)

2009(F)

Formulas

$6,000
4,000
13,000
16,000
39,000
61,000
$100,000

$8,400
0
18,200
22,400
49,000
85,400
$134,400

=(B28/B34)*C8
=IF((C28+C30+C31+C33)>B34,0,B29)
=(B30/B34)*C8
=(B31/B34)*C8
=sum(C28:C31)
=(B33/B34)*C8
=C32+C33

Liabilities and Shareholder's Equity

Current Liabilities
Account Payable
Accruals
Line of Credit
Other current liabilities
Total current liabilities

$7,000
2,300
8,300
1,400
$19,000

$9,800
3,220
32,554
1,400
$46,974

=(B38/B49)*C8
=(B39/B49)*C8
=B40+C64
=B41
=sum(C38:C41)

Long-term debt

18,000

18,000

Shareholders' equity
Common shares
Retained earnings
Total liabilities and equity

30,000
33,000
$100,000

30,000
39,426
$134,400

=B44

=B47
=B48+C18
=sum(C42:C48)

Vectra Manufacturing
Calculation of External Financing Required (EFR)
Based on the Percent-of-Sales Method
For the Forecast Year Ended December 31, 2009
Total Financing Required (TFR)
Less: Internal Sources
Increase in accounts payable
Increase in accruals
Reinvested Profits
EFR before adjustments
Add: Principal paid on loan
Adjusted external financing required (EFR)

$34,400
2,800
920
6,426
$10,146
0
$24,254

=C34-B34
=C38-B38
=C39-B39
=C18
=sum(C59:C61)
=B44-C44
=C57-C62+C63