Capital reinvestment

  Prepare proforma financial statements for the third year considering all information obtained about the entity (i.e. after reading the MD&A, the most recent annual reports, press releases, etc.). The starting point for the proforma financial statements is the unadjusted most recent year-end financial statement of the assigned company. The proforma statements should include the balance sheet, income statement and statement of retained earnings. Notes to the financial statements are not required. A bonus of 5 marks is available for completing a realistic pro forma cash flow statement. Assumptions should be explicitly stated and supported for the following inputs to the proforma statements: a. Inflation rate b. Growth rate c. Interest rate d. Capital reinvestment rate e. Dividend payout rate One expense item should be specified as primarily variable and one expense item should be specified as primarily fixed