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Example Proforma and Short Notes

The document is the balance sheet of Segamat Industries as of December 31, 2011. It shows current assets of RM660, fixed assets of RM700, total assets of RM1300, current liabilities of RM200, long-term debt of RM540, equity of RM560, and total claims of RM1300. It also provides projected financial information for 2012 based on expected 25% sales growth, including calculating projected sales, changes to the balance sheet accounts, new retained earnings, and additional funds needed.

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Maisarah Mazlan
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30 views

Example Proforma and Short Notes

The document is the balance sheet of Segamat Industries as of December 31, 2011. It shows current assets of RM660, fixed assets of RM700, total assets of RM1300, current liabilities of RM200, long-term debt of RM540, equity of RM560, and total claims of RM1300. It also provides projected financial information for 2012 based on expected 25% sales growth, including calculating projected sales, changes to the balance sheet accounts, new retained earnings, and additional funds needed.

Uploaded by

Maisarah Mazlan
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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SEGAMAT INDUSTRIES: BALANCE SHEET as of December 31, 2011

Asset RM Liability RM
Cash 50 Account Payable 50
Receivable 110 Notes Payable 75
Inventories 440 Accrued Taxes & Wages 75
Total CA 660 Total Current Liabities 200
Net Fixed Asset 700 Mortgage Bond 540
Common Stock 160
Retained Earning 400
TOTAL ASSETS 1300 TOTAL CLAIMS 1300

In year 2011, the current sales of Segamat Industries are RM1200 and the firm expects a 25% in sales in
the upcoming year.

The pro-forma income statement is based on:

• Net profit margin (NPM) of 12%


• Marginal tax rate of 40%
• Dividend payout ratio (DPR) of 60% and
• Total operating costs equal to 80% of sales
• The firm is operating at full capacity

Step 1 : Calculate the projected sales

S1 : 1200,000 (1+25%) current sale (1+ increasing sale of %)

: 1500

Step 2

Asset Proforma Changes


Cash 50 25% *50 = 12.50
Receivable 110 25% * 110 = 27.50
Inventories 440 25% *440 = 110
NFE 700 25%*700 = 175
Total Asset 1300 + 325 = 1625 12.50 + 27.50 +110+ 175 =325
Liabities Proforma Changes
Account Payable 50 25%*50 = 12.50
Accrued Taxes & Wages 75 25%*75 = 18.75
Total Current Liabilities 200+ 31.25 = 231.25 18.75+ 12.50 = 31.25
Total Retained Earning 472 72
AFN 221.75
Total CLaims 1300 + 325 = 1625 31.25 + 72 + 221.75 = 325

Step 3 : Calculate new retained earning

𝑅𝑒1 = 𝑅𝑒0 + (𝑆1 )(𝑁𝑃𝑀)(1 − 𝐷𝑃𝑅)


= 400 + (1500) (12%) (1- 60%)

= 472

Changes RE = 𝑅𝐸1 − 𝑅𝐸0

= 472 – 400 = 72

Step 4 : Additional Fund Needed

Total Changes of increasing in Asset – Total Changes of Increasing Spontaneous Liability – Changes of
Increasing in retained earning – funds from depreciation + other financing requirement

=325 – 31.25 – 72- 0 + 0

= 221.75

Step 5 : Prepare ProForma Balance Sheet 2012

Asset RM Liability RM
Cash 62.50 Account Payable 62.50
Receivable 137.50 Notes Payable 75.00
Inventories 550 Accrued Taxes & Wages 93.75
Total CA Total Current Liabities
Net Fixed Asset 875 Mortgage Bond 540
Common Stock 160
Retained Earning 472
AFN 221.75
TOTAL ASSETS 1625 TOTAL CLAIMS 1625

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