The selected financial statements for Micro Chip Computer Corporation are given. Answer questions 1 and 2 below based on the financial data.
1. Determine the year-to-year percentage annual growth in total net sales.
2. Based only on your answers to question #1, do you think the company will hit its sales goal of +10% annual revenue growth in 2005? Determine the target revenue figure, and explain why you do or do not feel that the company can hit this target.
1. Use the Percentage Sales Method and a 20% increase in sales to forecast Micro Chip's Consolidated Statement of Operations for the period September 26, 2004 through September 25, 2005. Assume a 15% tax rate and restructuring costs of 2% of the new sales figure.
2. Discuss your results from question number #1. What assumptions have you made? Do any of your assumptions seem unreasonable?
Use the annual information found here to answer this question. Calculate the following asset activity ratios for the end of 2005:
1. Average Collection Period
2. Inventory Turnover
3. Total Asset Turnover
The solution forecasts Micro Chip's Consolidated Statement of Operations using Percentage Sales Method