Financial Management (Determine the year-to-year percentage annual growth in total net sales) - Essay Example

From analysing the sales performance trends over the past five years, it is likely that the company will achieve its target of 10% sales growth for the year 2005. From year 2001 to 2003 the company has experienced a total negative growth of 48% , which has been reversed in 2004 with a growth of 36%. This is possibly with the recapturing of lost market shares or customers. The growth of 10% for 2005 will be a sales increase of only $ 834.00, which will take the overall sales of the company to US$ 9,168.00. It is still less than what the company were achieving in 2001 and therefore, the company is likely to recapture its lost sales and reach the 2005 targets.

Use the Percentage Sales Method and a 20% increase in sales to forecast Micro Chip's Consolidated Statement of Operations for the period September 26, 2004 through September 25, 2005. Assume a 15% tax rate and restructuring costs of 2% of the new sales figure.