of group: Fall 2006
Decision Inputs for Quarter Number 4
Pro forma sheet / Units demanded / 113000
S-T investment rate / 1.30% / Capital gains rate / 40.00%
Short-term loan rate / 2.75% / Two-year loan rate / 3.11%
Three-year loan rate / 3.59% / Long-term loan rate / 5.00%
Preferred stock yield / 0.00%
Units to be produced / 100000 / Per unit price / $104.00
Div. per common share / $0.13 / Advertising cost / $0
Demand/price forecast / $0 / Sales discount / 0%
Short-term investment / $0 / Risk of S-T investment / 0
Machine units bought / 10000 / Units of plant bought / 0
Project A / no / Project B / no
Short-term loan / $0 / Preferred shares / 0
Two-year loans / $0 / Common shares / 500000
Three-year loans / $0 / Common tender price / $18.00
Ten-year bonds / $-9000000 / Strike settlement(per hr.) / $0.00
Dollar penalty / $0
Pro Forma Income Statement or P&L (not Performance Report)
Quarter Number 4
Sales Revenue (100000 units at $104.00) aka Sales or Revenue / $10400000
Income from Securities / 81447 / $10481448
Cost of Goods Sold:
Beginning Inventory (0 at $0.00) / $0
Materials / $1738000
Direct Labor / 3588600
Total Direct Costs / $5326600
Warehousing Costs / $0
Depreciation: Mach. and Equip. / 644375
Plant / 1300000
Other Overhead Costs / 200000
Total Indirect Costs / 2144375
Production Costs (100000 at $74.71) / 7470975
Goods Available for Sale($74.71 per unit) / 7470975
Less: Ending Inventory (0 units) / 0
Cost of Goods Sold / 7470975
Gross Profit / $3010472
Selling and Administrative Expenses SG&A Operating Expenses / $1520000
Financial Expenses:
Short Term Bank Interest / $0
Penalty Loan Interest / 0
Intermediate Term Loan Interest / 48578
Bond Interest / 714086
Bond Redemption Costs (do not include this as part of interest expense) / 720000
Total Financial Charges aka Interest Expense / 1482664 / 3002664
Operating Income Before Extraordinary Items (This is NOT operating income) / $7808
Extraordinary Items / 0
Income Before Taxes aka Earnings Before Taxes / $7808
Income Tax (rate is 40%) / 3123
Income After Taxes aka Net Income, Net Profit, Net Earnings / $4685
Preferred Stock Dividend we will not use preferred stock in this class / 0
Earnings to Common Stockholders / $4685
Common Stock Dividends ($0.13 per share) / 192375
Net Income Transferred to Retained Earnings / $-187690
Pro Forma Balance Sheet
Quarter Number 4
ASSETS
Current Assets
Cash / $320207
Marketable Securities / 276095
Accounts Receivable / 6968000
Inventory(0 units at $74.71/UNIT) / 0
Total Current Assets / $7564302
Fixed Assets (net of depreciation) aka Property, Plant, and Equipment
Machinery and Equipment / $2987500
Plant / 24635250
Total Fixed Assets / 27622750
Total Assets / $35187052
LIABILITIES AND OWNER EQUITY
Current Liabilities
Accounts Payable / $552660
Short Term Loans Payable / 0
Short Term Penalty Loan / 0
Intermediate Term Debt Maturing / 1250000
Bonds Maturing / $3380800
Total Current Liabilities / $5183460
Long Term Liabilities
Intermediate Loans: 2 years / $0
3 years / 0
Bonds / 9836800
Total Long Term Liabilities / 9836800
Total Liabilities / $15020260
Owners' equity
Preferred Stock (0 shares) / $0
Common Stock (1479814 shares) / 16550892
Retained Earnings / 3615900
Total Equity / 20166792
Total Liabilities and Equity / $35187052
Summary Data
Quarter 4
INFORMATION FOR FUTURE QUARTERS:
5 / 6 / 7 / 8
Units of plant capacity / 140000 / 110000 / 110000 / 85000
Units of machine capacity / 110000 / 110000 / 55000 / 55000
Other overhead / $200000 / $200000 / $200000 / $200000
Depreciation: Machinery / 633750 / 633750 / 345000 / 345000
Projects / 0 / 0 / 0 / 0
Plant / 2057500 / 1736000 / 1736000 / 1382250
Principal repayment on debt:
Short-term / 0 / 0 / 0
2-year / 312500 / 312500 / 312500 / 312500
3-year / 0 / 0 / 0 / 0
Bonds / 845200 / 845200 / 845200 / 845200
Warehouse fees:
Units / First 2000 / Next 5000 / Over 7000
Cost/Unit / $1.00 / $3.00 / $8.00
Production costs per unit next quarter:
Materials / $17.38 / Machinery / $39.00 / Plant / $268.00
Units / First 60,000 / Next 40,000 / Next 20,000 / Over 120,000
Labor cost / $39.99 / $29.73 / $25.63 / $33.84
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