02 Jan Cash Dividends Paid

The Income statement and balance sheet for Camelot Inc. are provided here. Note that firm’s capital expenditures are expected to rise by $50,000 in the new year. This will lead to an increase of $5,000 in accumulated depreciation. Sales next year should be $4.3M

1. Using percentage of sales analysis techniques prepare a pro forma income statement and balance sheet for the next year.

2. Create a chart of sales by year for all years, including your pro forma estimate.

3. Add a trend line.

4. Create a scatter plot of sales vs. cogs. Add a trend line.

5. Regress cogs against sales.

6. Using your sales trendline and annual sales data forecast the sales level in the next 3 years (3 years after the year with 4.3M in sales). Forecast using the trend line as well as at least one of the following: trend, linest, regression.

Camelot Inc

Statement of Cash Flows

For the Year Ended Dec. 31, 2009 ($ in 000’s)

Cash Flows from Operations

Net Income

$ 44,220

Depreciation Expense

$ 20,000

Change in Accounts Receivable

$ (50,800)

Change in Inventories

$ (1,20,800)

Change in Accounts Payable

$ 29,600

Change in Other Current Liabilities

$ 4,000

Total Cash Flows from Operations

$ (73,780)

Cash Flows from Investing

Change in Plant & Equipment

$ (36,000)

Total Cash Flows from Investing

$ (36,000)

Cash Flows from Financing

Change in Short-term Notes Payable

$ 25,000

Change in Long-term Debt

$ 1,01,180

Change in Common Stock

$ –

Cash Dividends Paid to Shareholders

$ (22,000)

Total Cash Flows from Financing

$ 1,04,180

Net Change in Cash Balance

$ (5,600)