Cumulative Spreadsheet Analysis
This spreadsheet assignment is a continuation of the spreadsheet assignments given in earlier chapters. If you completed those assignments, you have a head start on this one.
Refer back to the instructions for preparing the revised financial statements for 2008 as given in part (1) of the Cumulative Spreadsheet Analysis assignment in Chapter 3.
1. Skywalker wishes to prepare a forecasted balance sheet, a forecasted income statement, and a forecasted statement of cash flows for 2009. Use the financial statement numbers for 2008 as the basis for the forecast, along with the following additional information.
(a) Sales in 2009 are expected to increase by 40% over 2008 sales of $2,100.
(b) In 2009, Skywalker expects to acquire new property, plant, and equipment costing $240.
(c) The $480 in operating expenses reported in 2008 breaks down as follows: $15 depreciation expense and $465 other operating expenses.
(d) No new long term debt will be acquired in 2009.
(e) No cash dividends will be paid in 2009.
(f) New short term loans payable will be acquired in an amount sufficient to make Skywalker’s current ratio in 2009 exactly equal to 2.0.
(g) Skywalker does not anticipate repurchasing any additional shares of stock during 2009.
(h) Because changes in future prices and exchange rates are impossible to predict, Skywalker’s best estimate is that the balance in accumulated other comprehensive income will remain unchanged in 2009.
(i) In the absence of more detailed information, assume that investment securities, long term investments, other long term assets, and intangible assets will all increase at the same rate as sales (40%) in 2009.
(j) In the absence of more detailed information, assume that other long term liabilities will increase at the same rate as sales (40%) in 2009.
(k) The investment securities are classified as available for sale. Accordingly, cash from the purchase and sale of these securities is classified as an investing activity.
(l) Transactions impacting other long term assets and other long term liabilities accounts are operating activities.
2. Repeat (1) with the following change in assumptions:
(a) Sales growth in 2009 is expected to be 25%.
(b) Sales growth in 2009 is expected to be 50%.
3. Comment on the forecasted values of cash from operating activities in 2009, assuming that sales will grow at 25%, 40%, and 50%, respectively.