Financial management Essay Example | Topics and Well Written Essays - 250 words - 2

Financial management - Essay Example Assuming that the cost of sales also increases by the same figure, the cost of sales has been increased by the same margin. R&D costs are assumed to remain the same for the two years, and the selling and administrative costs to increase by 20% of the figure in the previous year. Restructuring costs are computed as 2% of the total sales, and the taxation rate as 15% of the sales figure. After all this assumptions, the following forecasted statement is prepared. 4. The results shown above indicate that the net income for period September 26, 2008 through to September 25, 2009 indicate that Microchip Computer Corporation will earn a net income of $1777.34. To calculate this increase in net income is derived from a 20% increase in net sales, which is accompanied by a corresponding increase in cost of sales. The selling, general and administrative costs are also assumed to increase by the same figure. The forecast of the consolidated statements of operations included the following