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Make assumptions about historical financial ratios and historical income statement ratios. Then, create pro forma income statements that show the revenues of the company growing 100% per year for three years. In other words, the revenues of Talat-Nabil double each year. Using those pro forma income statements and the financial ratio assumptions you have made do the following for the next three years:

hold the cash constant at $50,

hold the land constant at $75

grow the accounts receivables by your assumed days in aging,

grow the inventory by your assumed inventory turnover

grow the PP&E using reasonable assumptions

grow the accounts payables by your assumed days in aging,

keep Notes Payable equal to zero ($0)

keep PIC constant at $40

grow the retained earnings by the income (profit) from the last period

add the asset side of the balance sheet to determine total assets

add the liabilities and equities side of the balance sheet (excluding Long Term Debt) to determine total liabilities and equities without long term debt.

Plug-in the long term debt that will make your balance sheet balance.

Practice Questions: For the following financial statements, please perform a financial analysis and create a statement of cash flows for each of the different periods TALAT-NABIL CONSTRUCTION COMPANY B/S @ 12/30/00 /S 2001 BIS @ 12/30/01 Cash A/R Invent PPE Land Cash A/R 35 25 20 100 20 A/P 25 N/P 75 LTD COGS 125 Invent 30 50 35 25 120 40 A/P 30 N/P 55 LTD 40 PIC 95 R/E Revenues$ 250 40 PIC 30 R/E Grs Mrgn SG&A Profit 125 60 65 PPE Land 190 190 260 260 BIS @ 12/30/02 30 100 B/S @ 12/30/03 50 200 100 100 75 /S 2002 /S 2003 Cash A/R (250) Invent50 Land 70 A/P 20 N/P O LTD 40 PIC 225 R/E Revenues $ 1,000 COGS Grs Mrgn SG&A Profit Cash A/R Invent PPE Land 140 A/P 20 N/P O LTD 40 PIC 325 R/E Revenues$ 500 Grs Mrgn SG&A Profit 250 120 130 750 250 150 100 100 355 355 525 525

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