MicroDrive Case
MicroDrive Case
MicroDrive Case
INCOME STATEMENT
Assets
Step 1:
The sales figures of the Microdrive company for the past 5 years given below.
2018 2058.00
2019 2534.00
2020 2472.00
2022 2850.00
Step 2:
Pro Forma Ratios Actual Historical Industry Forecast
2022 2023 Average Composite 2024
Costs / Sales 87.1%
Depreciation / Net plant &
equip. 10.2%
Cash / Sales 1.0%
Accounts Rec. / Sales 10.0%
Inventory / Sales 11.1%
Net plant & equip. / sales 33.3%
Accounts Pay. / Sales 1.0%
Accruals / Sales 2.0%
Long-term bonds/operating
assets 30.9%
Forecast Bases
INCOME STATEMENT Forecast
(in millions of dollars)
2022 2023 2024
2850.0 3000.0
Sales 0 0
2497.0 2616.2
Costs except depreciation 0 0
Depreciation 90.00 100.00
2587.0 2716.2
Total operating costs 0 0
EBIT 263.00 283.80
Less Interest 60.00 88.00
Earnings before taxes (EBT) 203.00 195.80
Taxes (40%) 81.20 78.32
NI before preferred dividends 121.80 117.48
Preferred dividends 4.00 4.00
NI available to common 117.80 113.48
2018 2019
Liabilities and equity
Accounts payable 30.00 60.00
Accruals 130.00 140.00
Notes payable 60.00 110.00
Total current liabilities 220.00 310.00
Long-term bonds 580.00 754.00
Total liabilities 800.00 1064.00
Preferred stock 40.00 40.00
Common stock 130.00 130.00
Retained earnings 710.00 765.98
Total common equity 840.00 895.98
Total liabilities and equity 1680.00 2000.00
Step 4:
A/P
accruals
total current liabilities
NOWC
TOTAL OPERATING CAPITAL = NOWC+NET PLANT AND EQUIPMENT
2022 2023 2024
net plant and EQIP
TOTAL OPERATING
CAPITAL
Step 5: