2.5 Forecasting - Solutions

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2.5 Forecasting - Solutions

University of Texas at Austin
Fin 320f - Foundations of Finance
Foundations of Finance Documents

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FIN 320F Foundations of Finance 2.5 Forecasting - Solutions This assignment is best completed in Excel. You can certainly do the work by hand, but it will be time-consuming. 1) Using the 2011 actual results from Homework 2.3, prepare a pro forma income statement to forecast Starbucks financial performance for the year ending Sep 30, 2012. Forecast assumptions are as follows:  Sales will rise 10% year-over-year (that is, Sales will increase 10% from 2011 to 2012).  COGS will rise at a constant percent of sales.  Depreciation Expense will be $550 million.  Selling, General & Administrative Expenses will be 40% of sales.  Interest & Other Income will equal $60 million. (Note: It says income, not expense.)  Income Tax Expense will rise at a constant percent of Earnings Before Taxes (EBT). Double-click on the financial statement below to see the Excel formulas that generated the forecasted figures. 2) Assume that a year has just flown by. Now it is time to compare Starbucks’ actual 2012 results to your 2012 forecast. The data from Starbucks’ actual income statement for the year ending Sep 30, 2012 is shown in random order below. Put the data in the proper order, and add the appropriate sub-totals and totals to create the 2012 Income Statement. All dollars are in millions. Income Tax Expense $674.4 SG&A Expense $4,938.5 Depreciation Expense $550.3 Total Revenue $13,299. 5 Costs of Sales $5,813. 3 Interest & Other Income $60.8 SourceDocument.docx Page 1 of 2 ©Heidi Toprac 2015-2022

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