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Performance Lawn Equipment Case Study 7
Part 1
The excel sheet above contains data needed to develop a pro forma income statement.
Dealers selling PLE products all receive 18% of sales revenue for their part of doing business,
and this is accounted for as the selling expense. The tax rate is 50%. Develop an Excel
worksheet to extract and summarize the data needed to develop the income statement for 2018
and implement an Excel model in the form of a pro forma income statement for the company.
Part 2
The CFO of Performance Lawn Equipment, J. Kenneth Valentine, would like to have a model to
predict the net income for the next 3 years. To do this, you need to determine how the variables
in the pro forma income statement will likely change in the future. Using the calculations and
worksheet that you developed along with other historical data in the database, estimate the
annual rate of change in sales revenue, cost of goods sold, operating expense, and interest
expense. Use these rates to modify the pro Forma income statement to predict the net income
over the next 3 years.
Because the estimates you derived from the historical data may not hold in the future, conduct
appropriate what-if, scenario, and/or parametric sensitivity analyses to investigate how the
projections might change if these assumptions don’t hold. Construct a tornado chart to show
how the assumptions impact the net income in your model.
Summarize your results and conclusions in a report to Mr. Valentine. All submissions must
conform to APA7 guidelines.
Module 7: Critical Thinking Assignment
Criteria
This criterion is linked
to a Learning
OutcomeRequirements
This criterion is linked
to a Learning
OutcomeContent
Ratings
10 to >8.0 pts
Meets Expectation
Includes all of the
required components,
as specified in the
assignment.
8 to >6.0 pts
Approaches
Expectation
Includes most of the
required components, as
specified in the
assignment.
10 to >8.0 pts
Meets Expectation
Demonstrates strong or adequate
knowledge of data analysis
techniques; correctly represents
knowledge from the readings
and sources.
Pts
6 to >4.0 pts
Below Expectation
Includes some of the
required components, as
specified in the
assignment.
8 to >6.0 pts
Approaches
Expectation
Some significant but not
major errors or
omissions in
demonstration of
knowledge.
4 to >0 pts
Limited Evidence
Includes few of the
required components,
as specified in the
assignment.
6 to >4.0 pts
Below Expectation
Major errors or
omissions in
demonstration of
knowledge.
4 to >0 pts
Limited
Evidence
Fails to
demonstrate
knowledge of the
materials.
10 pts
10 pts
Criteria
This criterion is linked
to a Learning
OutcomeData
Analysis
This criterion is linked
to a Learning
OutcomeSynthesis and
Evaluation: Business
Report
Ratings
10 to >8.0 pts
Meets Expectation
Provides a strong
critical analysis and
interpretation of the
case study data.
8 to >6.0 pts
Approaches Expectation
Some significant but not
major errors or omissions
in analysis and
interpretation.
10 to >4.0 pts
Meets Expectation
Demonstrates strong or
adequate synthesis and
evaluation of data to provide a
useful business report.
Pts
6 to >4.0 pts
Below Expectation
Major errors or
omissions in analysis
and interpretation.
4 to >3.0 pts
Approaches
Expectation
Some significant but not
major errors or omissions
in synthesis and
evaluation.
4 to >0 pts
Limited Evidence
Fails to provide critical
analysis and
interpretation of the
information given.
3 to >2.0 pts
Below Expectation
Major errors or
omissions in
synthesis and
evaluation.
2 to >0 pts
Limited Evidence
Fails to
demonstrate
synthesis and
evaluation.
10 pts
10 pts
Criteria
This criterion is linked
to a Learning
OutcomeDemonstrates
college-level
proficiency in
organization,
grammar, and style
Total Points: 45
Ratings
5 to >2.0 pts
Meets Expectation
Project is clearly
organized, well written,
and in proper format as
outlined in the
assignment. Strong
sentence and paragraph
structure; few errors in
grammar and spelling.
2 to >1.5 pts
Approaches Expectation
Project is fairly well
organized and written and
is in proper format as
outlined in the
assignment. Reasonably
good sentence and
paragraph structure;
significant number of
errors in grammar and
spelling.
1.5 to >1.0 pts
Below Expectation
Project is poorly
organized and does not
follow proper format.
Inconsistent to
inadequate sentence and
paragraph development;
numerous errors in
grammar and spelling.
Pts
1 to >0 pts
Limited Evidence
Project is not
organized or well
written and is not in
proper format. Poor
quality work;
unacceptable in terms
of grammar and
spelling.
5 pts
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