Maxs Grocery Mart- Projected Income Statement Research Paper

Maxs Grocery Mart- Projected Income Statement - Research Paper ExampleI have read the CQU policy on plagiarization and understand its implication. I can produce a hard copy of this assignment within 24 hours if requested.Maxs Grocery Mart is a family-owned business that has been experiencing a stable developing since its inception. Mr. Leroy Feronti, the owner of the business now wants to expand the business by renovating the grocery mart building with a bank loan. To help the screening for bank loan, Mr. Feronti has localized the pro forma financial statements for three years from 2007 onwards. The data of the accounting period 2006 are taken as the base, upon which the projections for 2007, 2008 and 2009 are based. The bank has demanded to prepare Pro forma Income Statement for three years on the basis of the belike growth and other important parameters of the firm. The statements are prepared projecting the future likely growth of the firm. The growth rates estimated are 7.25, 7.75 and 8.25 annually. The projected in come statement exhibits that at 7.25% growth rate, the firm will be able to come through $ 477175 net income. Similarly, for the year 2008 and 2009, the projected net income is $479400 and $481624 respectively. Mr. Feronti is besides asked to prepare projected income statement to reflect the changes in sales at various rates. The income statement is also prepared to reflect the impact on the net income of the increase in workers hourly rate from $12 to $14 and Mr. Ferontis salary is reduced from 15% to 8% of Gross earn. The impact of increase in the number of workers from 17 to 19 is also projected through income statement. Table of ContentsIntroduction4 preaching5Projected Income Statement for the Year 2007, 2008 and 20097Statement presentation the Impact on Net Profit on account of 9% growth in sales9Statement Showing the Impact on Net Profit on account of 9.5% growth in sales10Statement Showing the Impact on Net Profit on account of 10 % growth in sales11Statement Showing the Impact on Net Profit on account of 4% growth in sales12Statement Showing the Impact on Net Profit on account of 5% growth in sales13Statement Showing the Impact on Net Profit on account of 5.5% growth in sales14Pie Chart16Statement showing the impact on Net Income of the changes in employee hourly rate and Mr. Ferontis Salary17Statement showing the impact on Net Income of the changes in the no. of employees from 17 to 1918Recommendations20 appurtenance21IntroductionMaxs Grocery Mart is a family-owned business that has been experiencing a stable growth since its inception. Mr. Leroy Feronti, the owner of the business now wants to expand the business by renovating the grocery mart building with a bank loan. To finance the business expansion, Mr. Feronti has approached a bank. The bank wants Mr. Feronti to prepare Pro forma Income Statement for three years to keep the loan allocation as a formality. The pro forma financial statements are usuall y prepared in line with the likely changes in the financial personal business of a firm. Mr. Feronti prepared the statements taking into account the various changes that are likely to incur in his business. First, Income statement is prepared to reflect the growth at 7.25%, 7.75 %and 8% rates. The projected in come statement exhibits that at 7.25%