Author Question: Polaris Industries produces a wide range of outdoor leisure vehicles including all-terrain vehicles ... (Read 51 times)

daltonest1984 · **on:** Apr 25, 2021

Polaris Industries produces a wide range of outdoor leisure vehicles including all-terrain vehicles (ATV's), motorcycles, and snowmobiles. Forecast the financial statements for Polaris for Year 6. Use the percent of sales method based on Year 5 and the assumptions listed below. Please note the ratios to sales provided in the table which are useful for making the forecast.
Sales decline by 5.5%. The cost of debt is 11.76%. The tax rate is 31%. The depreciation rate is 12%. CAPEX is $28,360. The following accounts are held constant: Goodwill, Long-term debt, and Common Stock. Cash is the PLUG account. No dividends.
Forecast the financial statements for Polaris. What is the change in the cash account from Year 5 to Year 6?

Polaris Industries Inc.

Income Statement and Balance Sheet

As of December 31, Year 5 ($000s)

	Year 5	Ratios	Forecast
Revenue	$1,908,459		$1,803,494
COGS	1,454,374	0.762067
SG&A	213,114	0.111668
Dep. Exp.	28,632
EBIT	212,339
Int. Exp.	4,713
Income Before Tax	207,626
Income Taxes	64,348
Net Income	$143,278
ASSETS
Cash	$19,675
Accounts Receivable	354,313	0.185654
Total current assets	373,988
PP&E	222,336
Goodwill	172,632		172,632
Total Assets	$768,956
LIABILITIES AND OWNERS EQUITY
Total Current Liabilities	381,299	0.199794
Long Term Debt	18,000		18,000
Total Liabilities	$399,299
Owners Equity
Common Stock	417		417
Retained Earnings	369,240
Total Owners Equity	369,657
Total Liabilities and Owners Equity	$768,956

◦ -$132.146 million
◦ $135.146 million
◦ $139.157 million
◦ $146.187 million
◦ $154.821 million

rosiehomeworddo · **Reply #1 on:** Apr 25, 2021

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