Identify and describe the four-step process typically used to forecast sales for seasoned firms.

Comprehensive Learning Assessment 1

Respond to the prompt below in a 3 to 6 page APA formatted Word Document (page count excludes tables, graphs, appendices, title, and reference pages). Your answers should be clear, well-organized, and specific. Provide a concise, cogent argument and include details to support your response.

1. Identify and describe the four-step process typically used to forecast sales for seasoned firms.
2. Describe the difference between sustainable and internal growth rates and explain how each one is calculated.
3. You’ve collected the following information about XYZ, Inc:
Sales: $195,000
Net income: $17,500
Dividends: $9,300
Total debt: $86,000
Total equity: $58,000
• What is the sustainable growth rate for XYZ, Inc.?
• What growth rate could be supported with no outside financing at all?
4. The most recent financial statements for Moose Tours, Inc., follow. Sales for 2019 are projected to grow by 20%. Interest expense will remain constant; the tax rate and the dividend payout rate will also remain constant. Costs, other expenses, current assets, and accounts payable increase spontaneously with sales. The company’s average tax rate is 35%. Assuming the firm is operating at full capacity please provide responses to the following questions:
• Develop a pro forma income statement and balance sheet for 2019 and estimate the additional funds needed (AFN) for 2019 to support the 20% projected growth rate.
• Estimate the company’s sustainable sales growth rate based on the financial data for 2018. In making your estimate, calculate each component of the firm’s return on equity.
• Describe differences in calculation assumptions between Part A and Part B.

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