Please answer the questions below based on this financial data.
Fiscal Year      2004         2003       2002        2001       2000
Net Sales        $8,334       $6,141     $9,181     $11,933    $11,062
net Income(loss)  $811         $519       $519      $(1,245)    $424
Earning (loss)
per common share:
  Basic            $5.65       $3.84       $(9.15)   $(6.89)     $3.50
  Diluted          $4.64       $3.84       $(9.15)   $(6.89)      $3.45
Cash Dividends
declared per share   $--        $--         $--       $0.12       $0.48
Shares used in 
computing earnings
(loss) oer share
(in thousands):      
     Basic           143,500    135,000     136,000     144,500    121,192
     Diluted         174,900    169,000     136,000     144,500    123,047
Cash, cash 
equivalents, and      $5,426    $4,600       $3,859       $3,945    $952
short terms investmts
Total Assests         $6,161    $5,289       $5,233       $6,364    $6,231
long term debt         $300     $954         $951          $949     $303
Shareholder's Equity   $3,104   $1,642        $1,200       $2,058    $2,901

1) Determine the year-to-year percentage annual growth in total net sales.
2) Based only on your answer to question #1, do you think the company
will hit its sales goal of +10% annual revenue growth in 2005?
Determine you target revenue figure, and explain why you do or do not
feel that the company can hit this target.

On the Statement of Operations (listed below) for year ending
September 25,2004 please answer the questions below.  Please show all
work including formulas and calculations used to arrive at financial
values.  Please do this in an excel worksheet and provide an adequate
explanation of the methodology used to arrive at the answer.
Consolidated Statements of Operations for September 26, 2004 through
September 25, 2004.
Sales                 $8,334.00
Cost of Sales         $5,458.00
Gross Margin          $2,876.00
Operating Expenses:
         R&D            $525.00
Selling, General and
Administrative          $691.00
In-process R&D           -------
Restructing cost         -------
Total Operating Exp     $1,216.00
Operating Income        $1,660.00
Total interest & other
Income net                $194.00
Income before provision
for Income taxes        $1,854.00
Provision for Income 
Taxes (15%)               $278.10
Net Income              $1,575.90

1) Use the Percentage Sales Method and a 20% increase in sales to
forcast Apples' Consolidated Statement of Operations for the period of
September 26, 2004 through Setemeber 25, 2005. Assume a 15% tax rate
and restructuring cost of 2% of the new sales figure.

2) Discuss you results from qustion #1.  What assumptions have you
made?  Do any of your assumptions seem unreasonable?

---

Clarification of Question by supermom40-ga on 12 May 2005 21:02 PDT

Needed ASAP or by Friday May 13, 2005 by 3pm EST

Hi supermom!
Here are the answers to your questions.

Question 1

- Determine the year-to-year percentage annual growth in total net sales

Year     Sales        Growth
2000    $11,062     
2001    $11,933      (11933-11062)*100/11062 =   7.87%
2002     $9,181      (9181-11933)*100/11933  = -23.06%
2003     $6,141                              = -33.11%
2004     $8,334                              =  35.71%

- Based only on your answer to question #1, do you think the company
will hit its sales goal of +10% annual revenue growth in 2005?
Determine you target revenue figure, and explain why you do or do not
feel that the company can hit this target.

The target figure would be 10% more than $8,334; that is, $9,167. It
seems unlikely that the company will be able to achieve its sales
goal. The only significant large growth rate happened in 2004, while
during the previous 3 years it was either a bit smaller than 10% (in
2001) or strongly negative (in 2002 and 2003). So the trend in sales
is still pointing down. In fact, if we find the average growth rate,
we find that it's been -3.5% since 2001. So I believe, based solely on
sales data, that the company will not be able to increment its sales
by 10% in 2005.


Question 2

- Use the Percentage Sales Method and a 20% increase in sales to
forcast Apples' Consolidated Statement of Operations for the period of
September 26, 2004 through Setemeber 25, 2005. Assume a 15% tax rate
and restructuring cost of 2% of the new sales figure

In order to answer this question, we need to:

1) Find the sales figure forecast.
2) Find what percentage of the sales represent the different items in
the provided 2003-2004 statement.
3) Apply that percentage to the forecasted sales in order to find the
estimated value of the other items in the statement for 2004-2005.

The first step is easy. Since sales were $8,334, then the forecast for
next year is 20% more than that figure; that is, $10,000.80.

So here's the statement, including the percentage of sales each of the
items represent and how to calculate it:

                  Current           % of sales                 2004/05 estimate
Sales             $8,334                --                             $10,000
Cost of Sales     $5,458       5458*100/8334= 65.5%   65.5% of 10000 = $ 6,550
Gross Margin      $2,876       2876*100/8334= 34.5%   34.5% of 10000 = $ 3,450
R&D               $  525        525*100/8334= 6.3%     6.3% of 10000 = $   630
S, G and A        $  691        691*100/8334= 8.3%                     $   830
In proc R&D         --                  --                                --
Restruct cost       --                  --               2% of 10000 = $   200
Op Expenses       $1,216                --            630 + 830 + 200= $ 1,660
Op Income         $1,660                --                3450 - 1660= $ 1,790
Interest & other  $  194        194*100/8334= 2.32%    2.32% of 10000= $   232
Inc before taxes  $1,854                --                1790 + 232 = $ 2,022
Taxes (15%)       $  278.10             --             15% of 2022   = $   303.3
Net Income        $1,575.90             --             2022 - 303.3  = $ 1,718.7

Notice that I didn't calculate the percentage of the sales for many of
the items. This is simply because these items are calculations done
with other items, so it makes no sense to use the percentage of sales.
Specifically, we  have the following relationships:

Op Expenses      = "R&D" + "S, G and A" + "Restruct cost"
Op Income        = "Gross Margin" - "Op Expenses"
Inc before taxes = "Op Income" + "Interest & other income"
Taxes            = 15% of "Inc before taxes"
Net Income       = "Inc before taxes" - "Taxes"

- Discuss you results from qustion #1.  What assumptions have you
made?  Do any of your assumptions seem unreasonable?

The percentage sales method itself can be unrealistic. In particular,
I would expect costs to be higher than predicted by this method.
Probably, such growth rate would require expanding the firm, hiring
new workers, etc, all of which would have higher initial costs than
the predicted by the percentage method. Also, increasing the sales
could require the opening of new markets (selling new products, or in
different geographical locations, etc), which could temporarily boost
the cost of sales (as the firm makes mistakes because it has no
experience in producing the new products), or the selling costs
(marketing campaigns need to be done in cities where the product is
not yet known), etc. So I would expect these costs, in 2005 and for
some years to come, to represent a higher percentage of the sales than
the ones predicted by the percentage sales method.


I hope this helps! If you have any questions regarding my answer,
please don't hesitate to request a clarification. Otherwise I await
your rating and final comments.

Best wishes!
elmarto

your wonderful, thanks