Economics financial calculation Assignment Solved


The report is to create five year forecast of financial statement of the company with the given assumption of the current years and future years.

Backward calculation process has to use to prepare the Financial Statements i.e Income Statement, Balance Sheet and Cash Flow statement along with Ratios for the year 2019, and on the basis of 2019 statements and given assumptions, Forecast will be done for Year 2020 to 2024.

Data Available

There is no specific Data available other than Sales data assumption, so first sales has to be calculated and accordingly everything as per sales ratios can be generated. As per assumption following table is available for the market share for the industry and for the company:-


Industry (units)Market ShareGrowth RateShareIn Unit



As per assumption the product Decline will be discontinued after 5 years.

Assignment Assumption

Ratios/Statistics Net profit margin Asset turnover (x:1) Return on assets Total debt to equity (x:1) Return on equity (ROE) Accounts payable days Gross margin External debt to equity Return on sales Receivable days Inventory days WC excluding cash (x:1) Assets to equity (x:1) Dupont ROE Normal Dividend payout Cost of debt Cash tax rate Accounting tax rate Market statistics: Risk free rate Market rate expectation Beta Shares outstanding Capital Contributed (M$) Sustainable growth rate Cost of capital (WACC) Equity costs CAPM Share price (2019) Rating Agency Criteria2019 8.94% 2.0 17.88% 1 35.8% 34.50 45.0% 67.0% 8.94% 20 15 1 2 35.8% 40% 5% 26.50% 37.00% 4% 10% 1.6 20,000,000 40 3.0% 9.4% 13.6% 13.53Subsequent Year Calculate in subsequent years Calculate in subsequent years Calculate in subsequent years Calculate in subsequent years Calculate in subsequent years Stays same all years Calculate in subsequent years Stays same all years Calculate in subsequent years Stays same all years Stays same all years Calculate in subsequent years Calculate in subsequent years Calculate in subsequent years Stays same all years Stays same all years Stays same all years Stays same all years Stays same all years Stays same all years Stays same all years Stays same all years Stays same all years (in millions) Long term mature company Stays same all years Stays same all years Do valuation Credit Rating Ratios AAA A < 1 times > 1 < 3 times > 10% 5 to 10% >10 times >6 to 10 times >20% >10% to 20% up 3% flatAT ROS Lev ROS X AT X Lev


Additional Assumptions:-

Additional Capital expenses done will have average life of 10 years with straight line method of Depreciation

Few of the items are balancing figures like capital expenditure in the statement

Other Current Assets and other Current liabilities are increased by 5 %

  ABC’s  2019
 Industry (units)ShareIn UnitPriceTotal Sales
Total2,00,00,000.00 22,00,000 18,75,00,000.00
COGS(Balancing Figure)   10,31,25,000.00
Gross Profit @45%    8,43,75,000.00
Depreciation    10,90,000.00
Fixed Cost    2,67,53,750.00
NET PROFIT    5,65,31,250.00

Sales forecast

Total  20,34,00,000.00  22,18,52,625.00
COGS  11,39,04,000.00  12,64,55,996.25
Gross Profit @45%  8,94,96,000.00  9,53,96,628.75
Depreciation  10,90,000.00  10,90,000.00
Fixed Cost  2,67,53,750.002,67,53,750.00
NET PROFIT6,16,52,250.006,75,52,878.75
Total  23,74,20,488  25,44,20,288  29,86,29,803.26
COGS  13,77,03,882.75  15,01,07,970.07  17,91,77,881.95
Gross Profit @45%  9,97,16,604.75  10,43,12,318.18  11,94,51,921.30
Depreciation  10,90,000.00  10,90,000.00  10,90,000.00
Fixed Cost2,67,53,750.002,67,53,750.002,67,53,750.00
NET PROFIT7,18,72,854.757,64,68,568.189,16,08,171.30

Working notes:

Fixed Cost Calculation





Fixed Assets Calculation – Depreciation

MillionAverage useful Life
Cost10.910 years

Depreciation Per year

Balance life
5 years

Accumulated Depreciation

Balance Depreciation

Fixed Asset

Depreciation of next five Years 2020-2024
Old Assets

Capital Expenditure38.4410 year3.84


Statement to calculate the cash flow and other balancing for 2019

Format for financial statements (all cash models must be same ending cash) 
(in millions of dollars) 
Cash flow models 
A. EBITDA model 
–  Capital expenditures-38.44
–  Interest paid-1.57
– Cash taxes-16.71
– Net working capital incr *0
+ External debt issued31.37
– Dividends paid-11.68
Net cash flows for year20.59
Opening cash3.10
Ending cash23.69
B. Net income Model  
Net Income16.76 
+ Depreciation10.90 
+ Change in deferred taxes2.74 
Change in working capital
Change in other operating items


Cash flow from operations (CFO)30.40 
– Cash flow from investments (CFI)29.5Balancing Figure
Cash flow from financing (CFF):
– Dividends-11.68 
+ External debt31.4 
Total CFF
Net cash flows for year20.59 
Opening cash3.1 
Ending cash23.69 
C. Direct Method 
Net sales187.50
Costs of sales-103.13
Fixed costs-26.75
– Interest expense-1.57
– Taxes-16.71
– Capital expenditures-38.44
+ External debt31.37
– Dividends-11.68
Net cash flows for the year20.59
Opening cash3.1
Ending cash23.69

On the basis of above Assumptions the following forecast is done for financial statement of the company, there are other calculations which are on the basis of the ratio given for 2019 and other also

Balance sheet201920202021202220232024
Accounts receivable10.2711.1512.1613.0113.9416.36
Other current assets0.951.
Total current assets39.1466.0590.46117.75146.77185.80
Capital assets54.5054.5054.5054.5054.5054.50
Other long term assets0.
Total assets93.65120.55144.96172.25201.27240.30
Accounts payable9.7510.7711.9513.0214.1916.94
Deferred tax liability2.005.324.835.405.806.22
Other current liabilities3.713.904.094.294.514.74
Total current liabilities15.4619.9820.8722.7124.5027.89
External debt31.3740.3549.7960.0070.9285.22
Total debt46.8360.3370.6682.7095.42113.11
Capital contributed40.0040.0040.0040.0040.0040.00
Retained earnings6.8220.2234.3149.5565.8687.19
Liabilities & Equity93.65120.55144.96172.25201.27240.30
Income statementCurrentForecast
Net sales187.50203.40221.85237.42254.42298.63
Cost of goods sold103.13113.90126.46137.70150.11179.18
Gross Margin84.3889.5095.4099.72104.31119.45
Fixed costs:      
Other fixed costs26.7526.7526.7526.7526.7526.75
Interest expense1.572.022.493.003.554.26
Tax expense17.2917.0119.0220.4321.9327.27
Dividend Pay out11.106.718.919.3910.1610.87
Net income16.7622.2723.4825.4027.1835.56
Dividend Declared6.718.919.3910.1610.8714.22

Retained Earnings statement is used to carry forward the balances to Balance Sheet

Statement of retained earnings201920202021202220232024
Opening retained earnings-3.26.8620.2234.3149.5565.86
Net Income16.7622.2723.4825.4027.1835.56
Less Dividend-6.71-8.91-9.39-10.16-10.87-14.22
Ending retained earnings6.857520.2234.3149.5565.8687.19

Assumption is taken that Dividend Declared in given as payout in next financial year.

Working Capital Position of the company

Answer 3

The Company’s Working capital position has improved, as can be Seen in the Balance sheet, Company has grown because only the sales has increased but also the sales price of high end product i.e Mature has also increased which has resulted good inflow in the business and has resulted with working capital improvement

The company will accumulate or reduce cash over the forecast, why

Answer 4

The company is accumulating the cash , as currently there is no capital expenditure done due to no new product is launched and company is gaining from the Current product line, so it will be accumulating the cash for may be future investments .

Key ratios to the investor are deteriorating or improving, why

Answer 5

It is mixed, as Return on Equity has improved whereas the few of them have been static, but as the profit is going to increase and share price forecast is also that it will improve from investors point of view , it is good investment option. But Return on Assets has started reducing because of withdrawal of product Decline, so the asset utilization has also reduced


Ratios/Statistics201920202021202220232024Assumption /Guideline
Net profit margin8.94%10.95%10.59%10.70%10.68%11.91%Calculate in subsequent years
Asset turnover (x:1) in subsequent years
Return on assets17.88%18.47%16.20%14.74%13.51%14.80%Calculate in subsequent years
Total debt to equity (x:1)11.000.950.920.900.89Calculate in subsequent years
Return on equity (ROE)35.80%18%16%15%14%15%Calculate in subsequent years
Accounts payable days34.534.534.534.534.534.5Calculate in subsequent years
Gross Margin45.00%44%43.00%42.00%41.00%40.00%Stays same all years, reduces by 1 %
External debt to equity67.00%67.00%67.00%67.00%67.00%67.00%Calculate in subsequent years
Return on sales8.94%11%11%11%11%12%Stays same all years
Receivable days202020202020Stays same all years
Inventory days151515151515Stays same all years
WC excluding cash (x:1)13.314.335.195.996.66Calculate in subsequent years
Assets to equity (x:1)22.001.951.921.901.89Calculate in subsequent years
Dupont ROE35.80%36.98%31.60%28.36%25.68%27.96%Calculate in subsequent years
Normal Dividend payout40%40%40%40%40%40%Stays same all years
Cost of debt5%5%5%5%5%5%Stays same all years
Cash tax rate26.50%26.50%26.50%26.50%26.50%26.50%Stays same all years
Accounting tax rate37.00%37.00%37.00%37.00%37.00%37.00%Stays same all years
Market statistics:       
Risk free rate4%4%4%4%4%4%Stays same all years
Market rate expectation10%10%10%10%10%10%Stays same all years
Beta1. same all years
Shares outstanding2,00,00,0002,00,00,0002,00,00,0002,00,00,0002,00,00,0002,00,00,000Stays same all years
Capital Contributed (M$)404040404040Stays same all years (in millions)
Sustainable growth rate3.00%     Long term mature company
Cost of capital (WACC)9.40%9.40%9.40%9.40%9.40%9.40%Stays same all years
Equity costs CAPM13.60%13.60%13.60%13.60%13.60%13.60%Stays same all years
Share price (2019)13.5320.412.316.317.218.6Do valuation

The company is hold, buy or Sell


At this stage as per the forecast the company is growing and has a sustainable growth rate of 3% which indicates that one should sell it and in future it will give good returns. Secondly, investors can invest in the company but it extra –ordinary cash dividend of $50 M is paid then surely there is risk that in future if company has to invest in new products e.g Decline has already obsolete and it new product has to be launched for which company needs cash. It will have to borrow the funds increasing the cost of capital and debt equity ratio will also disturb which will affect the share price and return on equity. Ultimately it will impact the shareholder’s only.


A financial valuation model will include the analysis of the capital structure of the company, predicting the market value and the future earnings prospect. For this, the cash flow statements for the last five years, financial ratios and the market price of the stock. These information will be used for financial valuation.

Fundamental Analysis

In fundamental analysis, all fundamental macros and micros are taken into consideration in association with financial statement and balance sheet of a firm.

Constant perpetual growth model

In this model, it is assumed that dividend of a firm increases at a constant rate to perpetuity and pay-out ratio remains constant.

Value Per Share= Expected Rate of Return X Paid up Equity Value

Normal Rate of Return

Equity Value = Outstanding Shares X Current Share Price

= 2000000*13

= 2600000000

Stock Valuation (Basic) For 2020

P0 = D 0 (1 + g)/(i – g)
0= Most recent per-share dividend$11.10
i= Required return (discount rate)9.40%
g= Rate of growth( Market rate Expectation)10%
P0Value of one share of common stock= $11.10(1 + .10) /(.940 – .10) = $$20.35

Similarly for other financial Years from 2020 -2024 is also calculated as:-

2019 2020 2021 2022 2023 2024

Share price13.5320.412.316.317.218.6
Order Now

Get solved or fresh solution on Economics financial calculation Assignment and many more. 24X7 help, plag free solution. Order online now!

Universal Assignment (June 20, 2024) Economics financial calculation Assignment Solved. Retrieved from
"Economics financial calculation Assignment Solved." Universal Assignment - June 20, 2024,
Universal Assignment July 24, 2022 Economics financial calculation Assignment Solved., viewed June 20, 2024,<>
Universal Assignment - Economics financial calculation Assignment Solved. [Internet]. [Accessed June 20, 2024]. Available from:
"Economics financial calculation Assignment Solved." Universal Assignment - Accessed June 20, 2024.
"Economics financial calculation Assignment Solved." Universal Assignment [Online]. Available: [Accessed: June 20, 2024]

Please note along with our service, we will provide you with the following deliverables:

Please do not hesitate to put forward any queries regarding the service provision.

We look forward to having you on board with us.


Get 90%* Discount on Assignment Help

Most Frequent Questions & Answers

Universal Assignment Services is the best place to get help in your all kind of assignment help. We have 172+ experts available, who can help you to get HD+ grades. We also provide Free Plag report, Free Revisions,Best Price in the industry guaranteed.

We provide all kinds of assignmednt help, Report writing, Essay Writing, Dissertations, Thesis writing, Research Proposal, Research Report, Home work help, Question Answers help, Case studies, mathematical and Statistical tasks, Website development, Android application, Resume/CV writing, SOP(Statement of Purpose) Writing, Blog/Article, Poster making and so on.

We are available round the clock, 24X7, 365 days. You can appach us to our Whatsapp number +1 (613)778 8542 or email to . We provide Free revision policy, if you need and revisions to be done on the task, we will do the same for you as soon as possible.

We provide services mainly to all major institutes and Universities in Australia, Canada, China, Malaysia, India, South Africa, New Zealand, Singapore, the United Arab Emirates, the United Kingdom, and the United States.

We provide lucrative discounts from 28% to 70% as per the wordcount, Technicality, Deadline and the number of your previous assignments done with us.

After your assignment request our team will check and update you the best suitable service for you alongwith the charges for the task. After confirmation and payment team will start the work and provide the task as per the deadline.

Yes, we will provide Plagirism free task and a free turnitin report along with the task without any extra cost.

No, if the main requirement is same, you don’t have to pay any additional amount. But it there is a additional requirement, then you have to pay the balance amount in order to get the revised solution.

The Fees are as minimum as $10 per page(1 page=250 words) and in case of a big task, we provide huge discounts.

We accept all the major Credit and Debit Cards for the payment. We do accept Paypal also.

Popular Assignments

BUS7015 Financial Management Assessment

BUS7015 Financial Management Assessment Date for Submission: Please refer to the timetable on ilearn (The submission portal on ilearn will close at 14:00 UK time on the date of submission) Page 1 of 9 [3702] Arden University © reserves all rights of copyright and all other intellectual property rights in

Read More »

Assignment 1: Case studies of real-life organisations

Assessment 1: The individual essay is due in week 8 and ought to be 2000 words long.You will have the option of two essay questions based on case studies of real-life organisations. Pick option 1 or 2.Option 1. What was the Volkswagen Emissions Scandal?a) Explain the scandal, and if you

Read More »

Operations in Business SCQF 8 LNDN08004

SCHOOL OF BUSINESS AND CREATIVE INDUSTRIES Assignment Brief COURSEWORK Session 2023/2024 Module Title Operations in Business Level of Study SCQF 8 Module Code LNDN08004 Programme of Study BA (Hons) International Business Pathways Submission date and time Assessment 1: 19th July 2024 by 2 pm Assessment 2: 12th July 2024 by

Read More »

ARCH7004: Planning and Development Control Assessment 3

Assessment 3: Choose a particular type of commercial, industrial or high-rise development (Class 2-9 building) or subdivision that is currently being considered by a Consent Authority such as a Local Council (court or tribunal) or a State or Federal Government Agency (this may be the site from Assessment 2). Once

Read More »

Promote Person-Centred Approaches in Care Settings:

Remember when you are answering the questions to look at the command words and here is what each of these mean within the questions, below is a table with the meanings of some of the operative words you will see in this unit. Describe Give a clear description that includes

Read More »

Promote equality and inclusion in Care settings:

Remember when you are answering the questions to look at the command words and here is what each of these mean within the questions, below is a table with the meanings of some of the operative words you will see in this unit. Describe Give a clear description that includes

Read More »

Physical Activity, Health and Wellbeing Assignment

 Bsc Public Health and Health Promotion (Top up) June 23 Intake,  LONDON          Physical Activity, Health and Wellbeing Assignment Brief.                  Assessment 1: Poster Design and written presentation of a physical activity intervention (weighted at 20%). 800 words Your aim is to create an intervention that ‘nudges’ students and staff

Read More »

Innovation Proposal | Part 2 – Execution and Change Plan

Instructions:  Part 2 Research indicates that the execution and implementation of innovation is the greatest challenge for leaders. Generating ideas is deemed exciting while implementing change is considered the biggest challenge, which often results in organizational resistance. REQUIREMENTS Top of Form Bottom of Form Submission status Grading criteria Implementation Schedule,

Read More »

Innovation Proposal | Part 3 – Leadership Reflection and Application

Instructions  Part 3  REQUIREMENTS Top of Form Bottom of Form Submission status Grading criteria Analysis (see rubric in syllabus for evaluation guidelines) Beginning (0-55); Developing (56-63); Accomplished (64-71); Exemplary (72-80) Fully developed introspective analysis of how innovation impacts personal leadership. Thoroughly examines the influence of personal faith worldview on pursuing

Read More »


EDUCATORS INQUIRING ABOUT THE WORLD     ASSESSMENT 1 PROPOSAL PLAN (FORMATIVE) TEMPLATE (20 marks)  Complete the proposal under the following headings as they provide guidelines for the overall format and contents of the proposal.   DECLARATION: By submitting this assessment I declare the following  Remove ALL Blue Writing before submission. Leave

Read More »

Introduction to Sociology

Measurable Objectives Week 7 Materials The materials for the week address the issue of Crime & Deviance. Crime and Deviance are not the same!                                                                                      Crime is a violation of law (local, State, or federal laws).                                                                      Crime is a social construct. Crime is a product of someone’s reality. Deviance Deviance is

Read More »

MBA623 Healthcare Management: Technology Analysis

Assessment 3 Information Subject Code: MBA623 Subject Name: Healthcare Management Assessment Title Technology Analysis Assessment Type: Length: Individual video recording 10 minutes maximum Weighting: 30% Total Marks: Submission: 100 Online Due Date: Week 13 Your task Individually, you are required to record a 10-minute webinar discussing My Health Record’s role

Read More »

ARCH7004: Planning and Development Control Assessment 4

Assessment 4: Due on: 14 June 2024 NSW Students: The NSW Coast is considered of great importance in terms of its protection, conservation and development opportunities for the State. Describe the elements on the NSW Coastal Management Framework and the key aspects for development control within the State? What is

Read More »

EDM9780M CEEL Summative Assignment 2023-2024

Below you will find instructions on completing each of the four parts of your final summative assignment. Part 1 – Personal/professional area of interest in education (1000 – 1,500 words max) For this part of the assignment, you will need to: How to complete this part (Part 1): 1. Choose

Read More »


Weighting: 5 marks (10%) of the assignment. COMPLETE & SUBMIT INDIVIDUALLY. This is the second of THREE documents required for submission for the assignment. Complete the following, describing and reflecting upon your involvement with the preparation for the Group Presentation, including your interaction with other members of your team in

Read More »

SUMMATIVE ASSIGNMENT – Mathematics for Science

IMPORTANT INFORMATION 1 Electric power is widely used in industrial, commercial and consumer applications. The latter include laboratory equipment for example water baths, spectrophotometers, and chromatographs. If you have 17.3 kA and 5.5 MV, what is the power? Give the appropriate unit.                                                                                                               (3 marks) 2 Oil immersion objective lenses

Read More »

Assignment CW 2. Foundations of Biology

The instructions in RED are the ones which are mark-bearing and need to be answered as part of the assignment. The instructions in BLACK tell you how to carry out the simulation Diffusion simulation: Results table Use Excel to calculate the mean and standard deviation. The functions are AVERGAGE and

Read More »

MA Education Dissertation Proposal

Student Name Click here to enter text. Student ID                       Proposed title of research project Click here to enter text.       State the background references on which your research is based (ideally 4 or 5) Click here to

Read More »

Assignment: Implement five dangerous software errors

Due: Monday, 6 May 2024, 3:00 PM The requirements for assessment 1: Too many developers are prioritising functionality and performance over security. Either that, or they just don’t come from a security background, so they don’t have security in mind when they are developing the application, therefore leaving the business

Read More »


Business School                                                                 London campus Session 2023-24                                                                   Trimester 2 Module Code: LNDN08003 DATA ANALYTICS FINAL PROJECT Due Date: 12th APRIL 2024 Answer ALL questions. LNDN08003–Data Analytics Group Empirical Research Project Question 2-The project (2500 maximum word limit) The datasets for this assignment should be downloaded from the World Development Indicators (WDI)

Read More »

Microprocessor Based Systems: Embedded Burglar Alarm System

ASSIGNMENT BRIEF 2023/24 Microprocessor Based Systems   Embedded Burglar Alarm System Learning Outcomes This assignment achieves the following learning outcomes:   LO 2 -Use software for developing embedded systems in ‘C’ and testing microcontroller systems including the use of design tools such as Integrated Development Environments and In Circuit Debugger.

Read More »

Imagine you are an IT professional and your manager asked you to give a presentation about various financial tools used to help with decisions for investing in IT and/or security

Part 1, scenario: Imagine you are an IT professional and your manager asked you to give a presentation about various financial tools used to help with decisions for investing in IT and/or security. The presentation will be given to entry-level IT and security employees to understand financial investing. To simulate

Read More »

DX5600 Digital Artefact and Research Report


Read More »

Bsc Public Health and Health Promotion (Top up) LSC LONDON

Health and Work Assignment Brief.                 Assessment brief: A case study of 4,000 words (weighted at 100%) Students will present a series of complementary pieces of written work that:   a) analyse the key workplace issues; b) evaluate current or proposed strategies for managing them from a public health/health promotion perspective

Read More »

Can't Find Your Assignment?

Open chat
Free Assistance
Universal Assignment
Hello 👋
How can we help you?