Financial Statement Forecasting of Saizeria

Question: Discuss about theFinancial Statement Forecasting of Saizeria. Answer: Introduction Projected Assumptions for Income Statement The net sales ratio of Saizeria is projected to increase in the year 2014 in comparison to 2013. Moreover, gross profit of the company is anticipated to increase to 35.8% in the year 2014 in comparison to the previous year. Such increase can be predicted because of the reason the company has increased it new outlets and strengthened products (Healy and Palepu 2012). The company is anticipated to experience decrease in its operating income to 70.6% in the year 2014 in comparison to year 2013. This is because of the reason the company can face economic challenges because of certain factors namely unemployment situation and increase in consumption tax in the year 2014. Projected Assumptions for Balance Sheet Observing the total current assets of Saizeria, it can be projected that the net sales ratio of the company might decrease to 20.7% in the year 2014 as compared to the year 2013. Moreover, total non-current assets of the company are projected to increase to 61.7% in contrast to previous year. Total assets of the company are projected to increase to 82.2% and total liabilities are anticipated to increase to 20.5% in the year 2014. Increase in total assets can be projected for the reason the company has experienced increase in cash because of less repayment in long-term loans (Liang and Riedl 2013). Reference List Healy, P.M. and Palepu, K.G., 2012.Business Analysis Valuation: Using Financial Statements. London: Cengage Learning. Liang, L. and Riedl, E.J., 2013. The effect of fair value versus historical cost reporting model on analyst forecast accuracy.The Accounting Review,89(3), pp.1151-1177.