Microchip Computer Corp



Microchip Computer Corp

Question I

Explanation

The forecasting of the year 2008 and 2009 consolidated statement has been done through the use of percentage sales method. All the items such as Sales, CGS, GP, Net Income, Operating Income and expenses grow by 10%. The tax however is not included in the percentage of sales and is taken to be 15% of the EBIT. The restructuring costs were nil in 2007 but they increased in the 2008 and 2009 statements. The formula and the calculations are given in the excel sheet attached. The following table shows the forecasted results arrived.

The Statement ...