Financial Management

Micro Chip Computer Corporation

Unit 2 individual Project- FINA310-1205B-04: Financial Management

American InterContinental University

January 18, 2013

Abstract

Forecasting utilizes an earlier period of information in order to forecast the outlook of the corporation in a specified time period. In this assignment there will be a determination of the year-to-year percentage annual growth in total net sales based on financial statements for Micro Chip Computer Corporation, as well as taking into consideration of Micro Chip's Consolidated Statement of Operations for the year ended September 25, 2008.

To establish the year to year percentage you first calculate the net sales for the year by dividing into the following year such as:

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

Year Sales Growth Rate

2004 - $11,062

2005- $11,933 (11933-11062)*100/11062 = 7.87%

2006- $9,181 (9181-11933)*100/11933 = -23.06%

2007 -$6,141 (6141-9181)*100/9181 = -33.11%

2008- $8,334 (8334-6141)*100/6141 = 35.71%

The goal profit for 2009 has to be $9,167, which is 10% more of $8,334. According to the year-to-year percentage annual growth rate, it is improbable that the corporation is going to meet their sales goal. During 2008, the company had an extensively huge growth rate. They experienced a low growth rate, a little over 2% of the 10% goal in 2005 as well as a sturdy negative percentage during 2006 along with 2007. The development in sales is descending. Ever since the 2005, the typical growth rate was -3.15% in the last four years. According to the financial information given, the projection is that the company will be incapable of reaching a 10% sales target in the year 2009.

In considering Micro Chip’s Consolidated Statement of Operations for the year ended September 25, 2008. There will be a 25% increase in sales to forecast their operations for the year 2008 through 2009, thus will alter the current figures as follows: (1+25/100) = (1+0.3) = 1.3

| Current Year...