FINA310 IP TEMPLATE FOR STUDENTS
Student name:
Date:
ACTUAL FORECAST
Current Year Next Year
Total Revenue $71,879
Cost of Revenue $(51,125)
Gross Profit $20,754
Operating Expenses:
Selling, General, and Administrative $(14,248)
Research and Development $-
Special Income/Other Charges $(2,194)
Total Operating Expenses $(16,442)
Operating Income $4,312
Net Interest Income $(666)
edite
Pre-Tax Income $3,646
Provision for Income Tax (19.5%) $(711)
Net Income $2,935
Assignment Details
Part A: Forecasting with the Percentage of Sales Method calculation:
Utilizing the fictitious company Tag-It Corporation, prepare next year’s forecast in a pro forma income statement. Tag-It’s CEO requested a report of a forecast with an increase in total revenue of 17% for next year. Prepare a forecast for next year utilizing the percentage of sales method, and complete the column in the forecast section on the Excel spreadsheet below. Here is the current income statement for Tag-It:
Download the income statement.
Part B: Analyze the growth rate in sales and the CEO’s prediction
The total revenue numbers over the past 4 years for Tag-It Corporation were as follows (values in millions):
73,785
69,495
75,356
71,879
Determine whether you think Tag-It can hit the target of a 17% increase in sales next year.
Part C: Develop the CEO’s report with your findings.
Prepare a 5-page report that includes a pro forma forecast using the template provided and an analysis of Tag-It’s ability to hit the 17% increase in sales in a separate word document.
