Given the following case, calculate the independent effects of a 1 percent increase in Gross Margin, a 1 percent decrease in the TaxRate, and a 5 percent increase in Sales. Sales Cost of goods sold Selling, general, and administrative expense Depreciation Research and development Total costs and expenses Operating Income Interest expense Provision for Income Taxes Base Case Net Income $ 2,110 1,477 317 160 51 2,005 105 39 Earnings before Income Taxes $66 $ 13 1% Increase in Gross Margin Colossal Chemical Corporation Year Ended December 31, 2021 ($000,000 omitted) $53 $ 2110 1491 317 160 51 2019 91 39 52 10 42 $ 1% Decrease in Tax Rate 2110 1477 317 160 51 2005 105 39 13 SA 66 $ 53 $ SA 5% Increase in Sal 2215 1477 317 160 51 2005 105 39 210 42 168
Given the following case, calculate the independent effects of a 1 percent increase in Gross Margin, a 1 percent decrease in the TaxRate, and a 5 percent increase in Sales. Sales Cost of goods sold Selling, general, and administrative expense Depreciation Research and development Total costs and expenses Operating Income Interest expense Provision for Income Taxes Base Case Net Income $ 2,110 1,477 317 160 51 2,005 105 39 Earnings before Income Taxes $66 $ 13 1% Increase in Gross Margin Colossal Chemical Corporation Year Ended December 31, 2021 ($000,000 omitted) $53 $ 2110 1491 317 160 51 2019 91 39 52 10 42 $ 1% Decrease in Tax Rate 2110 1477 317 160 51 2005 105 39 13 SA 66 $ 53 $ SA 5% Increase in Sal 2215 1477 317 160 51 2005 105 39 210 42 168
Financial Reporting, Financial Statement Analysis and Valuation
8th Edition
ISBN:9781285190907
Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Chapter10: Forecasting Financial Statement
Section: Chapter Questions
Problem 5QE: Use the following hypothetical data for Walgreens in Years 11 and 12 to project revenues, cost of...
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