A basic percentage of sales model to forecast an income statement and balance sheet for Terran Mining Corporation (TMC).
This is a simple spreadsheet which will accept and calculate a wide range of values including negative interest rates and even a tax rate over 100%.
I leave it up to you. Please read the notes for book entry clarifications!
Warning! As with all forecasting approaches, the percentage of sales model has limitations - inputting extreme values may make the results meaningless.
|Sales growth rate||10||(%) Rate at which sales revenue will grow each year.|
|Dominion tax rate||30||(%) Anticipated Dominion government tax rate.|
|Interest rate||9.5||(%) Interest rate on debt and loans.|
|Payout ratio||25||(%) Amount of net income paid out as dividends.|
All figures in thousands of credits
|Year 0||Year 1||Year 2||Year 3|
|          Credit chips*||650||-||-||-|
|          Accounts receivable||83.65||-||-||-|
|          Total current assets||733.65||-||-||-|
|Property, plant, and equipment||3,606.7||-||-||-|
|          Accounts payable||83||-||-||-|
|          Accrued expenses payable||549||-||-||-|
|          Total current liabilities||632||-||-||-|
|          Common stock (0.01 credits par)||500||-||-||-|
|          Retained earnings||208.35||-||-||-|
|          Total stockholders' equity||708.35||-||-||-|
|Total liabilities & stockholders' equity||4,340.35||-||-||-|
|Required external financing***||0|
* Sometimes referred to as "cash".
** The balancing item, increases by required external financing. If no external financing is required, balance decreases to reflect company's decision to pay off long-term debt.
*** A "negative" external financing requirement suggests that internal growth is sufficient. Otherwise, possible sources of funding include various banks and the Moebius Foundation.