Koca Kola Corp.

Forecasted Financial Statements

Projections--2 years
[Thousands of Dollars]
Income Statements
Actual
2009
Net Sales
15000
Operating Expenses
-13000
Interest
-400
EBT
1600
Taxes (40%)
-640
Net Income (NI)
960
Cash Dividends (40% of NI)
Added Retained Earnings
Balance Sheets
Cash & Mkt Sec
Accounts Rec
Inventories
Total Current Assets
Fixed Assets, Net
Total Assets

Percent of Sales-Based Forecasts

Percent
of Sales
100.00%
86.67%

6.40%

-384
576
Actual
2009
1000
2000
2200
5200
6800
12000

Accounts Pay
1600
Bank Loan
1800
Acc Liab
1200
Total Current Liab
4600
Additional Funds Needed (AFN)
Long-Term Debt (New)
0
Long-Term Debt (Old)
2200
Common Stock
2400
Retained Earnings
2800
Total Iiab & Equity
12000

Forecast Basis

Base Forecast
[Without New Financing]
50% Growth
2010
22500
-19501
-400
2599
-1040
1560
-624
936

Percent
of Sales
6.67%
13.30%
14.67%
34.67%
45.33%
80.00%

1501
2999
3301
7801
10199
18000

10.67%

2401
1800
1800
6001
3664
0
2200
2400
3736
18000

8.00%

[Note: Interest rate on all interest-bearing debt (bank loan and long-term, old and new, debt) is 10%.
AFN is met by issuing new long-term debt.]
Base Forecast
Statement of Cash Flows
2010
Net Income
Inc. in A/R
Inc. in Inv.
Inc. in A/P
Inc. in Acc. Liab.
CF from Operations

1560
-999
-1101
801
600
860

Inc. in Fixed Assets, Net

CF from Investments

-3399
-3399

Inc. in Bank Loan

Inc. in Long-Term Debt (New)

Inc. in Common Stock
Payment of Cash Dividends
CF from Financing
Net Cash Flow
Beginning Cash
Ending Cash Before Borrowing
Target Ending Cash (% of sales)
Additional Funds Needed (AFN)
Cumulative AFN

0
0
-624
-624
-3163
1000
-2163
1501
3664
3664

Base Forecast
ithout New Financing]
80% Growth
2011
40500
-35101
-400
4999
-1999
2999

Revised Forecast
[With New Financing]
50% Growth
80% Growth
2010
2011
22500
40500
-19501
-35101
-766
-1690
2233
3708
-893
-1483
1340
2225

-1200
1800

-536
804

-890
1335

2701
5399
5941
14041
18359
32400

1501
2999
3301
7801
10199
18000

2701
5399
5941
14041
18359
32400

4321
1800
3240
9361
12903
0
2200
2400
5535
32400

2401
1800
1800
6001
132
3664
2200
2400
3604
18000

4321
1800
3240
9361
596
12903
2200
2400
4939
32400

Base Forecast
2011

Revised Forecast
2010
2011

2999
-2399
-2641
1921
1440
1320

1340
-999
-1101
801
600
640

2225
-2399
-2641
1921
1440
546

-8159
-8159

-3399
-3399

-8159
-8159

0
0
-1200
-1200
-8039
1501
-6539
2701
9240
12903

3664
0
-536
3128
369
1000
1369
1501
132
132

9240
0
-890
8350
736
1501
2237
2701
465
596

Koca Kola Corp.

Additional Funds Needed (AFN) Before Added Financing Costs
Schedule G
[$ Thousands]
Income Statements
Actual Percent
2009 of Sales
Net Sales
15000 100.00%
Operating Expenses
-13000
86.67%
Interest
-400
EBT
1600
Taxes (40%)
-640
Net Income (NI)
960
6.40%
Cash Dividends (40% of NI)
Added Retained Earnings
Balance Sheets

Sales Growth Rates

Forecast Basis

-384
576

Cash & Mkt Sec

Accounts Rec
Inventories
Total Current Assets
Fixed Assets, Net
Total Assets

Actual
2009
1000
2000
2200
5200
6800
12000

Accounts Pay
Bank Loan
Acc Liab
Total Current Liab
Additional Funds Needed
Long-Term Debt
Common Stock
Retained Earnings
Total Iiab & Equity

1600
1800
1200
4600
0
2200
2400
2800
12000

50%
2010
22500
-19501
-400
2599
-1040
1560
-624
936

Forecast Basis
6.67%
13.33%
14.67%
45.33%

10.67%
8.00%

2010
1501
2999
3301
7801
10199
18000
2401
1800
1800
6001
3664
2200
2400
3736
18000

[Note: Forecasts are prior to any new interest-bearing debt or equity financing.]
Statement of Cash Flows
Net Income
Change in A/R
Change in Inv.
Change in A/P
Change in Acc. Liab.
CF from Operations

2010
1560
-999
-1101
801
600
860

Change in Fixed Assets, Net

CF from Investments

-3399
-3399

Change in Bank Loan

Change in Long-Term Debt
Change in Common Stock

0
0
0

Payment of Cash Dividends

CF from Financing
Net Cash Flow
Beginning Cash
Ending Cash Before Borrowing
Target Ending Cash
Additional Funds Needed (AFN)
Cumulative AFN

-624
-624
-3163
1000
-2163
1501
3664
3664

80%

100%

50%

20%

2011
40500
-35101
-400
4999
-1999
2999

2012
81000
-70227
-400
10373
-4149
6224

2013
121500
-105341
-400
15760
-6304
9456

2014
145800
-126409
-400
18991
-7597
11395

-1200
1800

-2490
3734

-3782
5673

-4558
6837

2011
2701
5399
5941
14041
18359
32400

2012
5403
10797
11883
28083
36717
64800

2013
8104
16196
17824
42124
55076
97200

2014
9725
19435
21389
50549
66091
116640

4321
1800
3240
9361
12903
2200
2400
5535
32400

8643
1800
6480
16923
34008
2200
2400
9270
64800

12964
1800
9720
24484
53173
2200
2400
14943
97200

15557
1800
11664
29021
61239
2200
2400
21780
116640

2011
2999
-2399
-2641
1921
1440
1320

2012
6224
-5399
-5941
4321
3240
2445

2013
9456
-5399
-5941
4321
3240
5677

2014
11395
-3239
-3565
2593
1944
9128

-8159
-8159

-18359
-18359

-18359
-18359

-11015
-11015

0
0
0

0
0
0

0
0
0

0
0
0

-1200
-1200

-2490
-2490

-3782
-3782

-4558
-4558

-8039
1501
-6539
2701
9240
12903

-18403
2701
-15702
5403
21104
34008

-16464
5403
-11061
8104
19165
53173

-6445
8104
1659
9725
8066
61239

Koca Kola Corp.

AFN [With Interest on Old and New Interest-Bearing Debt]
Problem Set #1
[$ Thousands]
Income Statements
Actual Percent
2009 of Sales
Net Sales
15000 100.00%
Operating Expenses
-13000
86.67%
Interest
-400
EBT
1600
Taxes (40%)
-640
Net Income (NI)
960
6.40%
Cash Dividends (40% of NI)
Added Retained Earnings
Balance Sheets
Cash & Mkt Sec
Accounts Rec
Inventories
Total Current Assets
Fixed Assets, Net
Total Assets
Accounts Pay
Bank Loan
Acc Liab
Total Current Liab
Additional Funds Needed
Long-Term Debt (Old)
Long-Term Debt (New)
Common Stock (New)
Common Stock (Old)
Retained Earnings
Total Iiab & Equity

Sales Growth Rates

Forecast Basis

-384
576
Actual
2009
1000
2000
2200
5200
6800
12000
1600
1800
1200
4600
0
2200

50%
2010
22500
-19501
-583
2416
-966
1450
-580
870

Forecast Basis
6.67%
13.33%
14.67%
45.33%

10.67%

2010
1501
2999
3301
7801
10199
18000
2401
1800
1800
6001
66
2200
1832
1832
2400
3670
18000

8.00%

2400
2800
12000
AFN from first iteration =
Combined AFN =

3664
3729

[Note: AFN is financed by 50% new long-term debt and 50% new common stock issues.
Interest rate on all interest-bearing debt (bank loan and long-term, old and new, debt) is 10%,]
Statement of Cash Flows
Net Income
Change in A/R
Change in Inv.
Change in A/P
Change in Acc. Liab.
CF from Operations

2010
1450
-999
-1101
801
600
750

Change in Fixed Assets, Net

CF from Investments

-3399
-3399

Change in Bank Loan

Change in Long-Term Debt
Change in Common Stock
Payment of Cash Dividends
CF from Financing

0
0
0
-580
-580

Net Cash Flow

Beginning Cash
Ending Cash Before Borrowing
Target Ending Cash
Additional Funds Needed (AFN)
Cumulative AFN

-3229
1000
-2229
1501
3729
3729

80%

100%

50%

20%

2011
40500
-35101
-1045
4353
-1741
2612

2012
81000
-70277
-2100
8673
-3469
5204

2013
121500
-105341
-3059
13101
-5240
7861

2014
145800
-126409
-3462
15929
-6372
9558

-1045
1567

-2081
3122

-3144
4716

-3823
5735

2011
2701
5399
5941
14041
18359
32400

2012
5403
10797
11883
28083
36717
64800

2013
8104
16196
17824
42124
55076
97200

2014
9725
19435
21389
50549
66091
116640

4321
1800
3240
9361
298
2200
6452
6452
2400
5237
32400

8643
1800
6480
16923
910
2200
17004
17004
2400
8359
64800

12964
1800
9720
24484
1867
2200
26587
26587
2400
13075
97200

15557
1800
11664
29021
2970
2200
30620
30620
2400
18810
116640

12903
13202

34008
34918

53173
55040

61239
64209

2011
2612
-2399
-2641
1921
1440
933

2012
5204
-5399
-5941
4321
3240
4082

2013
7861
-5399
-5941
4321
3240
4082

2014
9558
-3239
-3565
2593
1944
7290

-8159
-8159

-18359
-18359

-18359
-18359

-11015
-11015

0
0
0
-1045
-1045

0
0
0
-2081
-2081

0
0
0
-3144
-3144

0
0
0
-3823
-3823

-8272
1501
-6771
2701
9472
13202

-19015
2701
-16314
5403
21717
34918

17421
5403
-12018
8104
20122
55040

-7548
8104
556
9725
9169
64209