ICS Manufacturing Company Case Study
Directions: Answer the questions. Be sure to show calculations/numbers used to solve the problems.
ICS Manufacturing Company produces plastic parts for the automotive industry. Here is their Income Statement for 2015 â
ICS Manufacturing Company
Income Statement for 2015
Sales Revenue $35,500,000
Cost of Goods Sold 12,725,000
Selling, General & Admin Exp 11,200,000
Depreciation Expense 3,200,000
EBIT 8,375,000
Interest Expense 350,000
Taxable Income 8,025,000
Taxes 3,210,000
Net Income 4,815,000
Transfer this income statement to an Excel spreadsheet and begin to prepare a Pro Forma Income statement for 2016 based on the following information:
1. Sales revenue to increase 5.2%, COGS to increase 4.5%, S,G&A will increase 3.8% and depreciation expense will be $3,255,000. Assume interest expense to be $375,000 and taxes are to be 40% of taxable income. You will now have income statements for 2015 and 2016 for ICS Manufacturing.
This is the balance sheet information for ICS Manufacturing Company:
ICS Manufacturing Company
Balance Sheet for year ending December 31, 2015
Assets Liabilities
Cash $2,625,000 Accounts Payable $5,825,000
Accounts Receivable $2,715,000 Other Current Liabilities $3,365,000
Inventories $1,514,000 Total Current Liabilities $9,190,000
Total Current Assets $6,854,000
Long Term Assets Long Term Liabilities
P, P & E $12,745,000 Long Term Debt $1,225,000 Goodwill $1,205,000 Other LT Debt $2,230,000
Intangible Assets $5,275,000 Total LT Liabilities $3,455,000
Total LT Assets $19,225,000 Total Liabilities $12,645,000
Total Assets $26,079,000
Ownersâ Equity
Common Stock $6,425,000
Retained Earnings $7,009,000
Total Ownersâ Equity $13,434,000
Total Liab/OE $26,079,000
Transfer this balance sheet to an Excel spreadsheet and begin to prepare a Pro Forma Balance Sheet for 2016 based on the following information:
2. Cash will increase to $2,825,000 and accounts receivable will increase by 15%. The inventories will go up 35% and P, P, &E will go up $2,000,000 with an expansion to the plant. Long term debt will increase to $2,000,000 to help finance the plant expansion and add $1,137,150 to other LT debt.. You will now have balance sheets for 2015 and 2016 for ICS Manufacturing.
ICS Manufacturing Company Case Study
Directions: Answer the questions. Be sure to show calculations/numbers used to solve the problems.
ICS Manufacturing Company produces plastic parts for the automotive industry. Here is their Income Statement for 2015 â
ICS Manufacturing Company
Income Statement for 2015
Sales Revenue $35,500,000
Cost of Goods Sold 12,725,000
Selling, General & Admin Exp 11,200,000
Depreciation Expense 3,200,000
EBIT 8,375,000
Interest Expense 350,000
Taxable Income 8,025,000
Taxes 3,210,000
Net Income 4,815,000
Transfer this income statement to an Excel spreadsheet and begin to prepare a Pro Forma Income statement for 2016 based on the following information:
1. Sales revenue to increase 5.2%, COGS to increase 4.5%, S,G&A will increase 3.8% and depreciation expense will be $3,255,000. Assume interest expense to be $375,000 and taxes are to be 40% of taxable income. You will now have income statements for 2015 and 2016 for ICS Manufacturing.
This is the balance sheet information for ICS Manufacturing Company:
ICS Manufacturing Company
Balance Sheet for year ending December 31, 2015
Assets Liabilities
Cash $2,625,000 Accounts Payable $5,825,000
Accounts Receivable $2,715,000 Other Current Liabilities $3,365,000
Inventories $1,514,000 Total Current Liabilities $9,190,000
Total Current Assets $6,854,000
Long Term Assets Long Term Liabilities
P, P & E $12,745,000 Long Term Debt $1,225,000 Goodwill $1,205,000 Other LT Debt $2,230,000
Intangible Assets $5,275,000 Total LT Liabilities $3,455,000
Total LT Assets $19,225,000 Total Liabilities $12,645,000
Total Assets $26,079,000
Ownersâ Equity
Common Stock $6,425,000
Retained Earnings $7,009,000
Total Ownersâ Equity $13,434,000
Total Liab/OE $26,079,000
Transfer this balance sheet to an Excel spreadsheet and begin to prepare a Pro Forma Balance Sheet for 2016 based on the following information:
2. Cash will increase to $2,825,000 and accounts receivable will increase by 15%. The inventories will go up 35% and P, P, &E will go up $2,000,000 with an expansion to the plant. Long term debt will increase to $2,000,000 to help finance the plant expansion and add $1,137,150 to other LT debt.. You will now have balance sheets for 2015 and 2016 for ICS Manufacturing.
