Instant noodle company

DO THE BALANCE SHEET AFTER FORECASTING THE INCOME STATEMENT.

Given:
Year 0:
Cash 50,000,000
Shares 10,000 shares
5,000 par value

Year 1:
Facility 25,000,000 cost
15 years of useful life
2,500,000 salvage value

Sizes Selling Price Volume (Yr 1) Cost/unit (Yr 1)

Regular 20 150,000 8
Large 35 230,000 10

Ending AR level 20% revenue

Ending inventory 35% of COGS
Ending AP 15% of COGS

Land 2,000 square meters

1,500 price per square meter
Rent Expense 3,000,000 CONSTANT

Tax rate 35%

Accrued salaries at year-end 25%
Accrued utilities at year-end 20%

Year 2:
Volume growth (Yr 2) 60%
Selling Price same
Cost/unit same

AR turnover 5
Formula: AR turnover = credit sales/average AR

Credit sales 80% of revenue

Average AR Average AR for the past 2 years (current year and last year)

Inventory turnover 6
Formula: Inventory turnover = COGS/average inventory

Average inventory Average inventory for the past 2 years (current year and last year)
AP turnover 5.50 credit purchases
Formula: AP turnover = credit purchases/average AP

Credit purchases 95% of purchases

Average AP Average AP for the past 2 years (current year and last year)

Year 3:
Volume growth 250%
Price same
Cost per unit
Regular 11
Large 16

Bond Issuance
Bonds (par value) 15,000,000
Coupon rate 10%
Term (years) 5

Facility improvement 4,000,000

Depreciable over 10 yrs at no salvage value

Marketing expense 1:4 marketing to sales

*for every peso spent on marketing, 4 pesos is earned on sales

*Those not mentioned in Year 3 have the same computation as those in Year 2.

Year 4:
Volume growth 30%
Selling Price
Regular 22
Large 36

Cost per unit

Regular 14
Large 21

AR turnover 4.5
Inventory turnover 5
AP turnover 5

Marketing expense 1:7 marketing to sales

Income Statement

Year 0 1 2

Investment in Facility (25,000,000)

Working Capital:
 AR (2,210,000)
Inventory (1,225,000)
AP 525,000

Selling Price - Regular 20 20

Units Sold 150,000 240,000
Revenues 3,000,000 4,800,000
Cost per unit 8 8
Cost of Goods Sold 1,200,000 1,920,000
Gross Profit 1,800,000 2,880,000

Selling Price - Large 35 35

Units Sold 230,000 368,000
Revenues 8,050,000 12,880,000
Cost per unit 10 10
Cost of Goods Sold 2,300,000 3,680,000
Gross Profit 5,750,000 9,200,000

Total Revenue 11,050,000 17,680,000

Total COGS 3,500,000 5,600,000
Total Gross Profit 7,550,000 12,080,000

Operating Expenses:
Marketing 10,000,000 5,000,000
Selling 500,000 1,500,000
Salaries 2,000,000 2,000,000
Utilities 1,000,000 2,000,000
Rent 3,000,000 3,000,000
Total OPEX 16,500,000 13,500,000
EBITDA (8,950,000) (1,420,000)
Depreciation expense (1,500,000) (1,500,000)
Interest expense
EBIT (10,450,000) (2,920,000)
Taxes 3,657,500 1,022,000
NOPAT (6,792,500) (1,898,000)

Balance Sheet

Year 0 Year 1 Year 2

Cash 50,000,000 17,497,500 17,328,264
AR 2,210,000 3,447,600
Inventory 1,225,000 641,667
Facility 25,000,000 25,000,000
Accum dep (1,500,000) (3,000,000)
Total Assets 50,000,000 44,432,500 43,417,530

AP 525,000 1,208,030
Accrued salaries 500,000 500,000
Accrued utilities 200,000 400,000
Bonds payable
Share Capital 50,000,000 50,000,000 50,000,000
Retained earnings (6,792,500) (8,690,500)
Total 50,000,000 44,432,500 43,417,530

Net Fixed Asset - 23,500,000 22,000,000

Net Common Equity 50,000,000 43,207,500 41,309,500

Cash Flow Statement

Net income (loss) (6,792,500) (1,898,000)
Depreciation 1,500,000 1,500,000
Total (5,292,500) (398,000)

AR (2,210,000) (1,237,600)
Inventory (1,225,000) 583,333
AP 525,000 683,030
Accrued salaries 500,000 -
Accrued utilities 200,000 200,000
Cash flow from operating (7,502,500) (169,236)

Investment in facility (25,000,000)

Cash flow from investing (25,000,000)

Sale of bonds
Cash flow from financing

Net change in cash (32,502,500) (169,236)

Ratios

Year 1 Year 2
Liquidity ratios:
Current ratio 17.0878 10.1600
Quick ratio 16.0878 9.8556
Cash ratio 14.2837 8.2201

Efficiency ratios:
Total Asset Turnover 0.2340 0.4025
Fixed Asset Turnover 0.9404 0.7771
Equity Turnover 0.2371 0.4184
nd last year)
ting, 4 pesos is earned on sales

3 4
 20 22
840,000 1,092,000
16,800,000 24,024,000
11 14
9,240,000 15,288,000
7,560,000 8,736,000

35 36
1,288,000 1,674,400
45,080,000 60,278,400
16 21
20,608,000 35,162,400
24,472,000 25,116,000

61,880,000 84,302,400
29,848,000 50,450,400
32,032,000 33,852,000

15,470,000 12,043,200
3,000,000 4,000,000
3,000,000 3,500,000
2,500,000 2,600,000
3,000,000 3,000,000
26,970,000 25,143,200
5,062,000 8,708,800
(1,900,000) (1,900,000)
(1,500,000) (1,500,000)
1,662,000 5,308,800
(581,700) (1,858,080)
1,080,300 3,450,720 219.42238%
Percentage change of NI after tax from Yr 3 to 4

Year 3 Year 4
20,974,939 23,211,820.0727
16,354,000 13,620,186.6667
9,307,667 10,872,493.3333
29,000,000 29,000,000.0000
(4,900,000) (6,800,000.0000)
70,736,606 69,904,500.0727

12,096,806 7,668,980.0727
750,000 875,000.0000
 500,000 520,000.0000
15,000,000 15,000,000.0000
50,000,000 50,000,000.0000
(7,610,200) (4,159,480.0000)
70,736,606 69,904,500.0727

24,100,000 22,200,000
42,389,800 45,840,520

1,080,300 3,450,720
1,900,000 1,900,000
2,980,300 5,350,720

(12,906,400) 2,733,813
(8,666,000) (1,564,827)
10,888,776 (4,427,826)
250,000 125,000
100,000 20,000
(7,353,324) 2,236,881

(4,000,000)
(4,000,000)

15,000,000
15,000,000

3,646,676 2,236,881

Year 3 Year 4

3.4942 5.2631
2.7968 4.0636
1.5715 2.5609

1.0841 1.1988
2.6846 3.6416
1.4786 1.9110