Pro forma Income Statement & Balance Sheet for Radial Inc.
This experiential exercise involves
creating a pro forma Balance Sheet and a pro forma Income Statement
for Radial Inc. Assume the current year is 2015. To assist you in
this endeavor, an Excel worksheet containing Radial's 2014 Income
Statement and Balance Sheet has been provided. Develop the two pro
forma financial statements for 2015 based upon the following
assumptions:
The company plans to increase sales
by an additional 2 percent in 2015 due to minor price increases.
In addition, the firm plans to launch a massive marketing
campaign in Europe. The campaign is anticipated to cost
$100,000,000 and to add an additional $500,000,000 in sales during
2015.
The company plans to invest an
additional $400,000,000 in additional research and development in
2015. New plant and equipment is projected to cost
$500,000,000, and will be depreciated over 20 years. (Note: Assume
the plant and equipment come on line the first day of 2013).
Salaries for new employees are estimated at $50,000,000 for
2013.
The company plans to finance
construction of the new facilities by taking on $500,000,000 in
long-term debt. The terms of the transaction include a 10-year
balloon loan at 5 percent interest. Interest payments are due on
December 31 for each of the next ten years.
The company anticipates issuing
100,000,000 new shares of common stock. The firm currently has
296,330,000 outstanding shares of common stock. The new shares are
expected to sell for $350 per share. The new offering is expected
to occur on January 1, 2015.
Show how each answer is
calculated.
Radial Inc. Pro Forma Income Statement | 12/31/2014 | 12/31/2015 |
(Values in Thousands) | ||
Total Revenue | 6,138,560 | |
Cost of Revenue, Total | 2,577,088 | |
Gross Profit | 3,561,472 | |
Operating Expenses | ||
Selling, General and Administrative Expenses | 854,684 | |
Research & Development | 599,510 | |
Depreciation/Amortization | 0 | |
Non Recurring | 90,000 | |
Total Operating Expenses | 1,544,194 | |
Operating Income or Loss | 2,017,278 | |
Income from Continuing Operations | ||
Total Other Income/Expenses Net | 125,175 | |
Earnings Before Interest and Taxes | 2,142,453 | |
Interest Expense | 776 | |
Income Before Tax | 2,141,677 | |
Income Tax Expense | 676,280 | |
Net Income from Continuing Operations | 1,465,397 | |
Net Income | 1,465,397 | |
Preferred Stock and Other Adjustments | 0 | |
Net Income Applicable To Common Shares | 1,465,397 |
Radial Inc. Pro Forma Balance Sheet | 12/31/2014 |
12/31/2015 |
(Values in Thousands) | ||
Assets | ||
Current Assets | ||
Cash and Equivalents | 4,173,211 | |
Short Term Investments | 4,157,073 | |
Net Receivables | 737,317 | |
Inventory | 0 | |
Other Current Assets | 229,507 | |
Total Current Assets | 9,297,108 | |
Long Term Investments | ||
Property, Plant and Equipment, Gross | 961,749 | |
Goodwill | 194,900 | |
Intangible Assets | 82,783 | |
Less: Accumulated Depreciation | 0 | |
Other Assets | 31,310 | |
Total Non-Current Assets | 1,270,742 | |
Total Assets | 10,567,850 | |
Liabilities and Shareholders' Equity | ||
Current Liabilities | ||
Accounts Payable | 672,285 | |
Short/Current Long Term Debt | 0 | |
Other Current Liabilities* | 73,099 | |
Total Current Liabilities | 745,384 | |
Non-Current Liabilities | ||
Long Term Debt | 0 | |
Deferred Income Taxes* | 61,585 | |
Deferred Long Term Liability Charges | 45,887 | |
Minority Interest* | 0 | |
Total Non-Current Liabilities | 107,472 | |
Total Liabilities | 852,856 | |
Shareholders' Equity | ||
Preferred Stock Equity* | 0 | |
Common Stock Equity | 296,330 | |
Retained Earnings | 2,055,868 | |
Capital Surplus | 7,477,792 | |
Other Stockholder Equity | -114,996 | |
Total Stockholders' Equity | 9,714,994 | |
Total Liabilities/Stockholders Equity | 10,567,850 |
Pro forma Income Statement & Balance Sheet for Radial Inc. This exper...
This exercise involves creating a pro forma Balance Sheet and a pro forma Income Statement for JetBlue Inc. To assist you in this endeavor, a worksheet containing JetBlue’s 2011 Income Statement and Balance Sheet has been provided. Develop the two pro forma financial statements for 2012 based upon the following assumptions. The company plans to increase sales by an additional 10 percent in 2012 due to minor price increases. In addition,the firm plans to launch a massive marketing campaign in...
Pro forma balance sheet. Next year, National Beverage Company will increase its plant, property, and equipment by $4,038,000 with a plant expansion. The inventories will grow by 30%, accounts receivable will grow by 25%, and marketable securities will be reduced by 47% to help finance the expansion. Assume all other asset accounts will remain the same and the company will use long-term debt to finance the remaining expansion costs (no change in common stock or retained earnings). Using this information...
Pro forma balance sheet. Next year, National Beverage Company will increase its plant, property, and equipment by $4,058,000 with a plant expansion. The inventories will grow by 31%, accounts receivable will grow by 21%, and marketable securities will be reduced by 53% to help finance the expansion. Assume all other asset accounts will remain the same and the company will use long-term debt finance the remaining expansion costs (no change in common stock or retained earnings). Using this information and...
Pro forma balance sheet. Next year, National Beverage Company will increase its plant, property, and equipment by $4,034,000 with a plant expansion. The inventories will grow by 34%, accounts receivable will grow by 15%, and marketable securities will be reduced by 53% to help finance the expansion. Assume all other asset accounts will remain the same and the company will use long-term debt to finance the remaining expansion costs (no change in common stock or retained earnings). Using this information...
1a. Pro Forma Income Statement Prepare a pro forma income statement and balance sheet for Thibodaux Inc. for 2020. For the Pro Forma Income Statement 2020: SALES = increase of 18.25% over 2019, 2019 Sales were $6,765,328 Gross Profit margin 60%, There are No Preferred Stock, OTHER EXP $1,500,000, Depreciation $500,000, Interest $600,000, Taxes 50%, Common Stock Dividend Payout Ratio 40% of Net Income 2019 Pro Forma IS 2020 Pro Forma IS Thibodaux Inc. Thibodaux Inc. Sales $6,765,328 $8,000,000 Cost...
Pro forma balance sheet: Basic Leonard Industries wishes to prepare a pro forma balance sheet for December 31, 2020. The firm expects 2020 sales to total $3,000,000. The following information has been gathered: (1) A minimum cash balance of $50,000 is desired. (2) Marketable securities are expected to remain unchanged. (3) Accounts receivable represent 10% of sales. (4) Inventories represent 12% of sales. (5) A new machine costing $90,000 will be acquired during 2020. Total deprecia- tion for the year...
Pro forma balance sheet-Basic Leonard Industries wishes to prepare a pro forma balance sheet for December 31, 2020. The firm expects 2020 sales to total $3,000,000. The following information has been gathered. (1) A minimum cash balance of $49,500 is desired. (2) Marketable securities are expected to remain unchanged. B) Accounts receivable represent 10.1% of sales. (4) Inventories represent 12.1% of sales. (5) A new machine costing $90,200 will be acquired during 2020. Total depreciation for the year will be...
Current Attempt in Progress Empire Enterprises: Pro Forma Income Statement and Balance Sheet ($ millions) EXHIBIT 19.10 The pro forma balance sheet for Empire Enterprises does not balance, and the differe nce is the amount of EFN. Because the company's board does not wish to issue common stock, the funding will have to take the form of long-term debt. Income Statement (Pro Forma) Net sales $120.0 180.0 $12.0 Costs Net income $ 7.2 Dividends Addition to retained earnings $4.8 Balance...
Pro forma Income Statement 6-8. The balance sheet of Free Enterprises, Inc., at the end of 2018 follows. Assets Cash Accounts Receivable Inventory Prepaid Expenses Total Current Assets Fixed Assets Total Assets Free Enterprises, Inc. Balance Sheet, Dec. 31, 2018 (Thousands of Dollars) Liabilities + Equity $ 4,000 Accounts Payable $ 4,400 10.000 Notes Payable 4,000 13,000 Accrued Expenses 5,000 400 Total Current Liabilities 13,400 27,400 Bonds Payable 6,000 11,000 Common Equity 19,000 $ 38,400 Total Liabilities and Equity $...
Pro forma balance sheet Peabody & Peabody has 2015 sales of $10.3 million. It wishes to analyze expected performance and financing needs for 2017—2 years ahead. Given the following information, respond to parts a. and b. (1) The percents of sales for items that vary directly with sales are as follows: Accounts receivable; 12.2%, Inventory: 17.7%, Accounts payable, 13.6%; Net profit margin, 3.4%. (2) Marketable securities and other current liabilities are expected to remain unchanged. (3) A minimum cash balance...