Pro Forma Analysis Assignment | Homework For You

Pro forma Analysis:

Save Time On Research and Writing
Hire a Pro to Write You a 100% Plagiarism-Free Paper.
Get My Paper

It is April 1, 2020.  Two Season Sports is a specialty backcountry skiing and mountaineering store in southwestern Colorado.  The shop ended 2019 in good shape, but the 2020 winter season was slow to take off because of a persistent La Nina weather pattern.  No snow, no sales.  By the end of March ski sales were 20% below expectations.  The summer season still looked promising, and with aggressive sales events, the owners thought that total sales for the year would be down just 10% from last year.  However, because of discounting the ski inventory the cost of goods sold as a percent of sales would increase from its historic 64% to 68%.  GA&S expense would increase to $150,000 for 2020 with some additional marketing costs and higher health insurance premiums for employees.  Depreciation Expense in 2020 will be $30,000.  A new ski base prep machine is the only new fixed asset purchased during 2020.  It costs $18,000.  No assets will be sold.Homework For You

The owners plan to reduce Inventory to $450,000 by the end of 2020.  This reduction in inventory will require deep discounts on some items.  These discounts are included in the estimate of Sales and COGS.  Other accounts (Cash, A/R and A/P) will be the same percent of sales in 2020 as in 2019.

  1. Develop pro forma financial statements for 2020 on the form provided.  Compute interest as if the Bank Loan and the LT Debt were reduced on January 1, 2020, so interest is based on your new year-end loan amounts for the entire year.
  2. Will the Bank Loan increase or decrease by the end of 2020? What changes contribute to the change in the bank loan; that is, what were the primary uses and sources of cash that caused the bank loan to change?

Assumptions (all numbers in thousands)

•      Sales will decrease 10% in 2020

Save Time On Research and Writing
Hire a Pro to Write You a 100% Plagiarism-Free Paper.
Get My Paper

•      COGS will increase to 68% of Sales in 2020.

•      GA&S will increase to $150,000 in 2020.

•      In 2020, depreciation expense will be $30,000, no assets will be sold and $18,000 of new assets will be purchased.

•      The bank loan has an interest rate of 5.6% and the Long-term Debt (LTD) has an interest rate of 7.2%.  LTD will be reduced by $90,000 during 2020. Another $90,000 payment will be due in 2021.

•      The tax rate is 30%.

  • Inventory will be reduced to $450,000 during 2020.

•      Cash, A/Receivable and A/Payable will be the same % of sales in 2020 as they were in 2019.  The minimum cash balance is 2% of Sales.

•      All earnings are retained to finance growth (No dividends are paid).

  • Assume Cash is kept at its minimum level as long as there is a loan outstanding.

This is all the data given. Get Finance homework help today

Calculate the price
Make an order in advance and get the best price
Pages (550 words)
*Price with a welcome 15% discount applied.
Pro tip: If you want to save more money and pay the lowest price, you need to set a more extended deadline.
We know how difficult it is to be a student these days. That's why our prices are one of the most affordable on the market, and there are no hidden fees.

Instead, we offer bonuses, discounts, and free services to make your experience outstanding.
How it works
Receive a 100% original paper that will pass Turnitin from a top essay writing service
step 1
Upload your instructions
Fill out the order form and provide paper details. You can even attach screenshots or add additional instructions later. If something is not clear or missing, the writer will contact you for clarification.
Pro service tips
How to get the most out of your experience with Homework Writing Services
One writer throughout the entire course
If you like the writer, you can hire them again. Just copy & paste their ID on the order form ("Preferred Writer's ID" field). This way, your vocabulary will be uniform, and the writer will be aware of your needs.
The same paper from different writers
You can order essay or any other work from two different writers to choose the best one or give another version to a friend. This can be done through the add-on "Same paper from another writer."
Copy of sources used by the writer
Our college essay writers work with ScienceDirect and other databases. They can send you articles or materials used in PDF or through screenshots. Just tick the "Copy of sources" field on the order form.
See why 20k+ students have chosen us as their sole writing assistance provider
Check out the latest reviews and opinions submitted by real customers worldwide and make an informed decision.
Customer 463813, May 11th, 2023
Great work
Customer 463647, May 3rd, 2023
Customer 463813, March 8th, 2023
Good discussion.
Customer 462359, April 4th, 2022
Customer 459155, May 31st, 2022
Business and administrative studies
Customer 459947, April 6th, 2022
English 101
Use Premium Grammarly for your edits.
Customer 462833, April 9th, 2022
The paper was great but it was almost 24 hours late
Customer 454067, February 21st, 2020
Smart response.
Customer 462457, April 13th, 2022
Human Resources Management (HRM)
Good work
Customer 463059, June 9th, 2022
Thank you so much for the help. This work is everything I could have asked for and more.
Customer 454439, June 8th, 2020
Great Content!
Customer 463469, October 20th, 2022
Customer reviews in total
Current satisfaction rate
3 pages
Average paper length
Customers referred by a friend
15% OFF your first order
Use a coupon FIRST15 and enjoy expert help with any task at the most affordable price.
Claim my 15% OFF Order in Chat