2.

Forecast of Balance sheet

2.1 Assets

Cash and cash equivalent

Cash is the balancing account that equals to total liabilities and

owners equity minus total assets excluding cash.

Short term investment

This account only occurred in 2009 and 2010 and no number was
recorded after that until 2014. However, it is expected that the
increase in sales in the future will strengthen BMPs CF so it is likely to
own more cash in hand. It is also expected that BMP will seek out some
investments to earn more profit; therefore, we forecast that in the next
years to come, the short term investment will increase even more and
up to 30% every year.

Account Receivables

The average days sales for accounts receivable is approximately 45

days and it is assumed that the company will maintain this for the
forecasting period. Other receivables may grow at a stable rate of 10%
per year. Advances to suppliers will increase compared with the
previous years as sales went up; company will be in need for more
materials to produce. It is projected that the item will grow at 15% in
2015 then 20% in 2016 and 2017 onwards. Also, the provision for bad
debts is likely to witness a 45%

decrease in 2015 and remain

unchanged in the next two years as the company is tightening its

control with bad debts especially with Duc Thanh and Thanh Tuyet
company as stated in the 2014 annual report.

Inventory

During the last 3 years, the inventories of BMP increased gradually;

however, the historical inventory turnover showed a slight fluctuation
over the years at approximately 4.71. Hence, the item figure is
expected to stay stable around the current average inventory turnover
4.71 till the next few years.

Other current assets

The percentage change of short term prepaid expense fluctuated from

way back 2009 to 2014. The percentage change is expected to stay
stable with a percentage change of 20% if BMPs management improve
in the next years to come while the percentage for other current assets
is projected as 30% in three forecasted years

Long term investments

BMP had invested quite an amount in Da Nang Plastic JSC; however,

the performance of this company wasnt up to their expectation. As a
result, BMP intends to withdraw from Da Nang and invest in Binh Minh
Viet JSC instead. Based on their intention, it is expected that the
investment in joint ventures will grow at level of 5% in the forecasting
period whereas other long term investments and provision for
diminution in value of long-term financial investment are assumed to
stay stable for this three year period.

Other long term assets

It is observed that from 2012 to 2014, the long term prepaid expense
had increased even though its figure decreased slightly in 2014 . There
is a possibility that this trend will continue in at least the next 5 years,
thus, it is expected to rise at the rate of 20% while deferred tax assets
reduced to 10% in 2015 and 11% onwards due to a decline in DTA.
2.2

Liabilities

From 2012 to 2014 the short-term debts account witnessed fluctuation

a lot yet when compared with the downward trend, the rate is
supposed to decrease at the percentage of 20%. For long-term debts, it
is clear that the company doesnt fund its activities by borrowing from
banks as the long term debts of the company stay at 0% for the last
few years. Advances from customers also are forecasted to reduce to
10% then back to 15% rise after that because of the growth of the sale
revenue forecasted each year. With taxes and payable to stage budget
account, we assume the rate will go up to 10% in2015 but then reduce
to the very same rate after. The payables to employees (salaries) is
also expected to rise up to 22% in 2015 then 10% onwards as the
company has the plan to enhance its HR. Since 2012, the proportion of
the customers prepayments has been quite stable so it is expected to
continue in the future from 2015 afterwards. For other liabilities such
as accrued expenses, provision for employee compensation, bonus
welfare and funds, short-term provisions

and other short-term

payable, they are expected to grow proportionately with the sales.

Therefore, we assume that the growth rates of them are the same
with those of sales revenue.
2.3

Owners equity

From the number provided it is clear that BMP is operating with a very
low

leverage

capital

structure.

However,

there

is

not

enough

information as to whether BMP has the intention of issuing more shares

or not so we will assume that for the next few years, there is no
additional share issuance. Thats why the capital and share premium
are also expected to stay unchanged.
The company is expected to have no treasury stock, no assets
revaluation difference, no foreign exchange difference and no other
funds in the future.

Other sources of funds stayed quite stable from 2-3% of total assets
from 2012 to 2014, so the company is assumed to maintain the figure
at around that said ratio of the total assets. In terms of investment and
development funds, financial reserve funds and other funds, the
detailed figure is showed in the assumption of forecasting excel file.
For retained earrnings, we calculate based on the formula: (REend= REbeg+ NI Dividend
for common shareholders) and the exact number is presented in excel.