Professor Crocker H. Liu Revised: March 3, 2004
Financial Management
Percentage of Sales Forecasting Method
Objective: The objective of this assignment is to forecast the income statement and
balance sheet and future financing requirements using an Excel spreadsheet. The
percentage of sales method, which relates various (but not all) financial statement line
items as a percentage of net sales, is the technique used.
Company: Williams-Sonoma, Inc. (ticker WSM) is a nationwide
specialty retailer of high quality products for the home. These
products, representing seven distinct merchandise strategies,
Williams-Sonoma, Pottery Barn, Pottery Barn Kids, PBTeen,
Hold Everything, West Elm and Chambers, are marketed
through 523 stores, eight mail order catalogs and five e-
commerce web sites (see for example http://www.williams-
sonoma.com). Their business concepts are designed to cover
every conceivable room in the house from the kitchen to the
living room, bedroom, home office, and even the hall closet.
The company was founded b
homebuilder, who in 1947 arrived in
and owned a hardware store th
cookware shop.
On January 8, 2004, WSM
guidance for the 52 weeks endin
(Fiscal Year 2003)1. Net revenues
in the range of $2.742 billion to
represents revenue growth in the
16.9% versus fiscal year 2002.
percentage of net revenues is projected to be in the range o
unchanged from previous guidance. Selling, general and administr
percentage of net revenues are projected to be in the range
Depreciation and amortization expense for fiscal year 2003
approximately $100 million. Diluted earnings per share for fiscal yea
to be in the range of $1.26 to $1.31.
Competitors (Peer Group): Bed Bath and Beyond (BBBY), Bom
Plus (CPWM), and Pier 1 Imports (PIR).
1 Source: http://biz.yahoo.com/bw/040108/85263_1.html
1
y Chuck Williams, a
Sonoma, California
en