Mini Case 6 Spreadsheet

PHARMA BIOTECH CORPORATION Forecasted Financial Statements Chapter 6 Mini Case--2 years [Thousands of Dollars] Income Statements Actual 2012 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 Accounts Pay Bank Loan Acc Liab Total Current Liab Additional Funds Needed (AFN) Long-Term Debt (New) Long-Term Debt (Old) Common Stock Retained Earnings Total Iiab & Equity

Percent of Sales-Based Forecasts

Percent of Sales Forecast Basis 100.00% (1+growth rate) x Cur. Sales 86.67% .8667 x Forecasted Sales Initially Fixed 40% of EBT 6.40%

-384 576 Actual 2012 1000 2000 2200 5200 6800 12000 1600 1800 1200 4600 0 2200 2400 2800 12000

40% of NI

Percent of Sales 6.67% 13.33% 14.67% 34.67% 45.33% 80.00%

Forecast Basis .0667 x Forecasted Sales .1333 x Forecasted Sales .1467 x Forecasted Sales .4533 x Forecasted Sales

10.67% .1067 x Forecasted Sales 8.00% .0800 x Forecasted Sales

[+ Inc. in Forecasted RE]

Base Forecast [Without New Financing] 50% Growth 80% Growth 2013 2014 22500 40500 -19501 -35101 -400 -400 2599 4999 -1040 -1999 1560 2999 -624 936

-1200 1800

Base Forecast 2013 2014 1501 2701 2999 5399 3301 5941 7801 14041 10199 18359 18000 32400 2401 1800 1800 6001 3664 0 2200 2400 3736 18000

4321 1800 3240 9361 12903 0 2200 2400 5535 32400

Revised Forecast [With New Financing] 50% Growth 80% Growth 2013 2014 22500 40500 -19501 -35101 -766 -1690 2233 3708 -893 -1483 1340 2225 -536 804

-890 1335

Revised Forecast 2013 2014 1501 2701 2999 5399 3301 5941 7801 14041 10199 18359 18000 32400 2401 1800 1800 6001 132 3664 2200 2400 3604 18000

4321 1800 3240 9361 596 12903 2200 2400 4939 32400

[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.] Statement of Cash Flows Net Income Inc. in A/R Inc. in Inv.

Base Forecast 2013 2014 1560 2999 -999 -2399 -1101 -2641

Revised Forecast 2013 1340 -999 -1101

2014 2225 -2399 -2641

Inc. in A/P Inc. in Acc. Liab. CF from Operations

801 600 860

1921 1440 1320

801 600 640

1921 1440 546

Inc. in Fixed Assets, Net CF from Investments

-3399 -3399

-8159 -8159

-3399 -3399

-8159 -8159

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

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

0 3664 0 -536 3128 369 1000 1369 1501 132 132

0 9240 0 -890 8350 736 1501 2237 2701 465 596

PHARMA BIOTECH CORPORATION Forecasted Financial Statements Chapter 6 Mini Case--2 years [Thousands of Dollars] Income Statements Actual 2012 Net Sales 15000 x Operating Expenses -13000 x 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 Accounts Pay Bank Loan Acc Liab Total Current Liab Additional Funds Needed (AFN) Long-Term Debt (New) Long-Term Debt (Old) Common Stock Retained Earnings Total Iiab & Equity

Percent of Sales-Based Forecasts

Percent of Sales

Forecast Basis

Base Forecast [Without New Financing] 50% Growth 2013

Forecast Basis

Base Forecast 2013

-384 576 Actual 2012 1000 2000 2200 5200 6800 12000

Percent of Sales x x x x x x

1600 x 1800 1200 x 4600 0 2200 2400 2800 12000

[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.] Statement of Cash Flows Net Income Inc. in A/R Inc. in Inv. Inc. in A/P Inc. in Acc. Liab. CF from Operations Inc. in Fixed Assets, Net CF from Investments Inc. in Bank Loan

Base Forecast 2013 0 2000 2200 -1600 -1200 1400 6800 6800 0

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 0 0 8200 1000 9200 0 -9200 -9200

Base Forecast Without New Financing] 80% Growth 2014

Base Forecast

Revised Forecast [With New Financing] 50% Growth 80% Growth 2013 2014

2014

Revised Forecast 2013 2014

2014 0 0 0 0 0 0

Revised Forecast 2013 2014 0 0 2000 0 2200 0 -1600 0 -1200 0 1400 0

Base Forecast

0 0

6800 6800

0 0

0

0

0

0 0 0 0 0 0 0 0 0 -9200

0 0 0 0 8200 1000 9200 0 -9200 -9200

0 0 0 0 0 0 0 0 0 -9200