# Micro Chip Computer Corporation

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Micro Chip Computer Corporation

Part 1; Question 1:

Using the financial statement that was selected, determine the year to year percentage annual growth in total sales.

Part 1; Answer 1:

Micro Chip Computer Corporation

Fiscal Year 2000 2001 2002 2003 2004

Net Sales \$11,062M \$11,933M \$9,181M \$6,141M \$8,334M

Year to Year Growth* &#8722; 8% -23% -33.00% 36%

* figured by taking one year sales minus the previous year sales divided by the same previous year sales.

Part 1; Question 2:

Using the year to year growth I figured in the answer to question 1, do you think that the company will hit its sales goal of +10% annual revenue growth for 2005? Determine the target revenue figure, and explain why you do or do not feel that the company can hit this target?

Part 1; Answer 2:

To figure the target revenue for 2005 we take 2004 net sales and multiply that by 1.10. \$8,334M * 1.10 = \$9,167M.

I can conclude that in 2005 the company will more than likely meet its sales goal of + 10%. Looking at the sales growth for each year I can see how this company has done in past and present years One reason why I do think they can meet their goal is because the sales did grow from 200 to 2001 by 8%. The next couple of years the company had a sharp decrease which was more than likely a result of economic troubles. In year 2004 sales increased again exceeding the expectations which show great promise that the annual revenue growth for 2006 can be attained.

Part 2; Question 1:

Based on the consolidated statement of operations for the year ending September 25, 2004, use the percentage sales method plus an increase of 20% in sales to forecast the consolidated statement of operations for the period September 26, 2004 through September 25, 2005, with the assumption of a 15% tax rate and restructuring costs of 2% of the new sales figure.

Part 2; Answer 1:

Micro Chip Computer Corporation Consolidated Statement

Consolidated Statements of Operations For the period September 26, 2004 through

September 25, 2005.

Sales \$10,000.80M \$8.334M + 20% = \$10,000.80M

Cost of Sales \$6,549.60M \$5,458M + 20% = \$6,549.60M

Gross Margin \$3,451.20M \$10,000.80M - \$6.549.60M = \$3,451.20M

Operating expenses:

R & D \$630M \$525M + 20% = \$630M

Selling, General, and Administrative \$829.20M \$691M + 20% = \$829.20M

In-process R & D

Restructuring costs \$200.02M \$10,000.80M * 2% = \$200.02M

Total Operating Exp \$1,659.22M \$630M + \$829.2M + \$200.02M = \$1,659.22M = \$1,659.22M

Operating income \$1,791.98M \$3,451.20M - \$1,659.22M = \$1.791.98M

Total interest and other Income net \$232.80M \$194M + 20% = \$232.80M

Income before provision for Income taxes \$2,024.78M \$1,791.98M + \$232.80M = \$2,0274.28M

Provision for income

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