## Income statement Forcasting

Sales are forecast to increase by 15% in 2015.

Short-term Debt and Common Stock will not change. Net Plant and Equipment is forecasted to be $950 next year. Depreciation Expense in 2015 is expected to be$350.
In 2015, the company the dividend payout ratio will be 90%.

In 2015, cost of goods sold is expected to be 65% of sales.

Cash is expected to be 1% of sales, and inventories will be 4% of sales. Accounts payable will be 3% of sales.

Catherine expects the company to pay 15% compounded annually on its short-term debt. The interest expense on the short-term debt in 2015 is calculated as interest rate on Short-term debt * amount of short-term debt outstanding at the end of 2014.

The company’s tax rate is 30%.
Forecast the follwing income statement for 2015 with the above information and the Answers to 2014.