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Toy World Case

The document contains two pro forma financial statements for a seasonal and level production model in 1994. The balance sheet shows cash and inventory fluctuating monthly under seasonal production. The income statement shows monthly sales and costs varying under seasonal production but remaining constant under level production. Operating expenses are $200/month for both models.

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420 views9 pages

Toy World Case

The document contains two pro forma financial statements for a seasonal and level production model in 1994. The balance sheet shows cash and inventory fluctuating monthly under seasonal production. The income statement shows monthly sales and costs varying under seasonal production but remaining constant under level production. Operating expenses are $200/month for both models.

Uploaded by

dwchief
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
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Exhibit 1 -- Pro-Forma Balance Sheet under Seasonal Production, 1994 (thousands of dollars)

Cash
Accounts
Receivable
Inventory
Current Assets
Net Plant &
Equipment

Actual
Dec. 31,
1993
Jan
$ 200 $ 878

Feb
$ 1,526

Mar
$ 1,253

Apr
$ 1,054

May
$ 915

June
$ 696

July
$ 527

Aug
$ 200

Sept
$ 200

Oct
$ 200

Nov
$ 200

2,905
1,060
260
300
300
280
280
300
1,780
3,460
3,980
4,425
586
586
586
586
586
586
586
586
586
586
586
586
--------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------$ 3,691 $ 2,524 $ 2,372 $ 2,139 $ 1,940 $ 1,781 $ 1,562 $ 1,413 $ 2,566 $ 4,246 $ 4,766 $ 5,211

Total Assets

1,176
1,176
1,176
1,176
1,176
1,176
1,176
1,176
1,176
1,176
1,176
1,176
--------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------$ 4,867 $ 3,700 $ 3,548 $ 3,315 $ 3,116 $ 2,957 $ 2,738 $ 2,589 $ 3,742 $ 5,422 $ 5,942 $ 6,387

Accounts Payable

Notes Payable, Bank


Accrued Taxes
Long-Term Debt,
Current portion
Current Liabilities
Long-Term Debt
Shareholders'
Equity
Total Liabilities &
Equity

282
752
88

36
0
31

42
0
(23)

48
0
(162)

42
0
(251)

42
0
(305)

42
0
(394)

48
0
(448)

486
433
(352)

552
1,741
(271)

642
1,745
(126)

686
1,677
33

50
50
50
50
50
50
50
50
50
50
50
50
--------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------$ 1,172 $ 117 $
69 $ (64) $ (159) $ (213) $ (302) $ (350) $ 617 $ 2,072 $ 2,311 $ 2,446
400
3,295
--------$ 4,867

400
3,183
--------$ 3,700

400
3,079
--------$ 3,548

400
2,979
--------$ 3,315

400
2,875
--------$ 3,116

400
2,770
--------$ 2,957

375
2,665
--------$ 2,738

375
2,564
--------$ 2,589

375
2,750
--------$ 3,742

375
2,975
--------$ 5,422

375
3,256
--------$ 5,942

375
3,566
--------$ 6,387

102112

Dec
$ 200
3,400
586
--------$ 4,186

1,176
--------$ 5,362

334
942
40

50
--------$ 1,366
350
3,646
--------$ 5,362

Exhibit 2 -- Pro Forma Income Statement under Seasonal Production, 1994 (thousands of dollars)

Sales
Cost of Goods
Sold
Gross Profit

Jan
120

Feb
140

Mar
160

Apr
140

May
140

June
$ 140

July
160

Aug
$ 1,620

Sept
$ 1,840

Oct
$ 2,140

Nov
$ 2,285

Dec
$ 1,115

84
-------$
36

98
-------$
42

112
-------$
48

98
-------$
42

98
-------$
42

98
-------$
42

112
-------$
48

1,134
-------$ 486

1,288
-------$ 552

1,498
-------$ 642

1,600
-------$ 685

780
-------$ 335

200
7
2
--------

200
4
4
--------

200
4
5
--------

200
4
4
--------

200
4
3
--------

200
4
3
--------

200
3
2
--------

200
5
1
--------

200
12
1
--------

200
17
1
--------

200
17
1
--------

200
14
1
--------

Operating Expense
Interest Expense
Interest Income

Profit Before Taxes

$ (169) $ (158) $ (151) $ (158) $ (159) $ (159) $ (153) $

Income Taxes

Net Profit

282

341

(57) $ (54) $ (51) $ (54) $ (54) $ (54) $ (52) $


96
--------------------------------------------------------$ (112) $ (104) $ (100) $ (104) $ (105) $ (105) $ (101) $ 186

426

116
-------$ 225

469

145
-------$ 281

159
-------$ 310

122

42
-------$
80

102412

Total
$ 10,000
7,000
-------$ 3,000

2,400
95
28
-------$
$

533

182
-------$
351

Exhibit 1 -- Pro-Forma Balance Sheet under Level Production, 1994 (thousands of dollars)

Cash
Accounts
Receivable
Inventory

Actual
Dec. 31,
1993
$ 200

Jan
$
541

Feb
$
983

Mar
$
370

Apr
200

May
$
200

June
$
200

July
$
200

Aug
$
200

2,905
1,060
260
586
1,050
1,502
------------------------$ 3,691 $ 2,652 $ 2,745 $

300
1,940
--------2,610 $

300
2,391
--------2,891 $

280
2,843
--------3,323 $

280
3,294
--------3,774 $

300
3,733
--------4,233 $

1,780
3,220
--------5,201

Total Assets

1,176
1,176
1,176
------------------------$ 4,867 $ 3,828 $ 3,921 $

1,176
--------3,786 $

1,176
--------4,067 $

1,176
--------4,499 $

1,176
--------4,950 $

1,176
--------5,409 $

1,176
--------6,377

Accounts Payable

Current Assets
Net Plant &
Equipment

Notes Payable, Bank


Accrued Taxes
Long-Term Debt,
Current portion
Current Liabilities
Long-Term Debt
Shareholders'
Equity
Total Liabilities &
Equity

282

752
88

233

0
(39)

467

0
(75)

50
50
50
------------------------$ 1,172 $
245 $
442 $
400

400

3,295
--------$ 4,867

400

3,183
--------$

3,828

3,079
--------$

3,921

467

467

0
(109)

421
(145)

994
(181)

50
--------407 $

50
--------792 $

400

400

2,979
--------$

467

3,786

2,875
--------$

4,067

467

467

1,611
(218)

2,241
(288)

2,944
(209)

50
--------1,329 $

50
--------1,910 $

50
--------2,470 $

50
--------3,252

400

375

375

2,770
--------$

467

4,499

2,665
--------$

4,950

375

2,564
--------$

5,409

2,750
--------$

6,377

Inventory Equation:

Last period inventory + Level Production Amt - (Sales* COGS %)

102112

Sept
$
200

Oct
$
200

Nov
$
200

Dec
$
396

Average
Difference %
50%

3,400
586
--------4,382

100%
364%

3,460
2,565
--------6,225 $

100%

1,176
1,176
1,176
1,176
--------------------------------7,401 $ 7,070 $ 6,571 $ 5,558

467

467

4,425
769
--------5,395 $

467

3,684
(149)

2,955
(32)

2,017
96

50
--------4,051 $

50
--------3,439 $

50
--------2,630 $

375

375

375

2,975
--------$

3,980
1,714
--------5,894 $

7,401

3,256
--------$

7,070

6,571

130%

467

179%

942
103

272%
56%

50
--------1,562
350

3,566
---------

142%

100%
285%
100%

3,646
---------

100%

5,558

130%

Exhibit 2 -- Pro Forma Income Statement under Level Production, 1994 (thousands of dollars)

Sales
Cost of Goods
Sold

Gross Profit

Operating Expense $
Interest Expense
$
Interest Income
$

Jan
120

Feb
140

Mar
160

Apr
140

May
140

July
160

Oct
2,140

104
-------$
56

210
2
--------

$
$
$

$
$
$

$
$
$

$
$
$

$
$
$

$
$
$

$
$
$

210
22
1
--------

$
$
$

210
28
1
--------

$
$
$

210
22
1
--------

1,198
-------642

91
-------$
49

210
17
1
--------

Sept
1,840

91
-------$
49

210
12
1
--------

1,055
-------565

91
-------$
49

210
7
1
--------

Aug
1,620

104
-------$
56

210
3
1
--------

June
$ 140

91
-------$
49

210
1
--------

78
-------42

210
3
--------

1,393
-------747

Profit Before Taxes

(166) $ (157) $ (153) $ (163) $ (168) $ (172) $ (170) $

334

406

516

Income Taxes

138
-------268

114
-------221

Net Profit

(56) $ (54) $ (52) $ (55) $ (57) $ (59) $ (58) $


-------------------------------------------------(109) $ (104) $ (101) $ (108) $ (111) $ (114) $ (112) $

175
-------340

COGS %:
Level Prod /Month
Add'l OpEx /Month

65.1%
$ 542.50
9.5833333

102412

$
$
$

Nov
2,285
1,488
-------797

$
$
$

Dec
1,115

Total
$ 10,000

726
-------389

6,510
-------$ 3,490

$
$
$

210
15
1
--------

$
$
$

210
7
1
--------

$
$
$

2,515
134
13
--------

573

174

854

195
-------378

42
-------132

273
-------$
581

9.63
9.625%

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