Fina310 Unit 2
Unit 2 Individual Project
The Unit 2 Individual project states that I am to determine the year-to-year percentage annual growth in total net sales for the Micro Chip Computer Corporation. After looking at the chart I do not think that the Micro Computer Corporation is going to make the +10% annual revenue growth in 2009. I got this by taking each year and adding them together and then dividing them to get the year-to-year growth. After doing this I took all of the percentages and averaged them out. This is showing that there is a -3.1% drop. Also using the CAGR there is a -6.8% which is not helping the company show that it will make the revenue growth. With this it will be very hard for the company to actually make a +10% revenue growth in 2009. Below is showing the loss and gains that were made every year. The second part of the Individual Project is to consider the Micro Chip’s Consolidated Statement of Operations for the year ended September 25, 2008. With this information the percentage sales method and a 25% increase in sales is to be used to forecast Micro Chip’s Consolidated Statement of Operations for the period of September 26, 2008 through September 25, 2009. For this we are to assume a 15% tax rate and a restructuring cost of 5% of the new sales figure. After doing all of the calculations I have the results for the forecast of the Micro Chip’s company. The assumption I have made is that everything is going to go up and the net income is going to be higher than the year before. By looking at the information I do not think that any of my assumptions are unreasonable.
For the period Sept 26, 2007 thru Sept 25, 2009 2008 2009
Sales 8,334 10417.5
Cost of goods sold 5,458 6,823
Gross Margin 2,876 3,595
Operating Expense
R&D 525 656.25
SGA 691 863.75
In Process R&D
Restructuring cost 521
Total Operating Expense 1,216 2041
Operating Income 1,660 1,554
Total interest and other income net 194 1,554
Income before provision for income taxes
The Unit 2 Individual project states that I am to determine the year-to-year percentage annual growth in total net sales for the Micro Chip Computer Corporation. After looking at the chart I do not think that the Micro Computer Corporation is going to make the +10% annual revenue growth in 2009. I got this by taking each year and adding them together and then dividing them to get the year-to-year growth. After doing this I took all of the percentages and averaged them out. This is showing that there is a -3.1% drop. Also using the CAGR there is a -6.8% which is not helping the company show that it will make the revenue growth. With this it will be very hard for the company to actually make a +10% revenue growth in 2009. Below is showing the loss and gains that were made every year. The second part of the Individual Project is to consider the Micro Chip’s Consolidated Statement of Operations for the year ended September 25, 2008. With this information the percentage sales method and a 25% increase in sales is to be used to forecast Micro Chip’s Consolidated Statement of Operations for the period of September 26, 2008 through September 25, 2009. For this we are to assume a 15% tax rate and a restructuring cost of 5% of the new sales figure. After doing all of the calculations I have the results for the forecast of the Micro Chip’s company. The assumption I have made is that everything is going to go up and the net income is going to be higher than the year before. By looking at the information I do not think that any of my assumptions are unreasonable.
For the period Sept 26, 2007 thru Sept 25, 2009 2008 2009
Sales 8,334 10417.5
Cost of goods sold 5,458 6,823
Gross Margin 2,876 3,595
Operating Expense
R&D 525 656.25
SGA 691 863.75
In Process R&D
Restructuring cost 521
Total Operating Expense 1,216 2041
Operating Income 1,660 1,554
Total interest and other income net 194 1,554
Income before provision for income taxes
References: Brooks, J, M. (2010). Financial Management: Core Concepts (2nd ed.). Upper Saddle, NJ: Pearson Education Inc.