Utilizing the fictitious company Tag-It Corporation, prepare next year’s forecast in a pro forma income statement. Tag-It’s CEO requested a report of a forecast with an increase in total revenue of 20% for next year. Prepare a forecast for next year utilizing the percentage of sales method, and complete the column in the forecast section on the Excel spreadsheet below. Here is the current income statement for Tag-It:
Download the income statement.
Part B: Analyze the growth rate in sales and the CEO’s prediction
The total revenue numbers over the past 5 years for Tag-It Corporation were as follows (values in millions):
2018 72,710
2019 75,360
2020 78,112
2021 93,561
Determine whether you think Tag-It can hit the target of a 20% increase in sales next year.
Part C: Develop the CEO’s report with your findings.
Prepare a 5-page report that includes a pro forma forecast using the template provided and an analysis of Tag-It’s ability to hit the 20% increase in sales in a separate word document.
