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Sales $3,000 Operating costs excluding depreciation 2,450 EBITDA $ 550 Depreciation 250 EBIT $ 300 Interest 125 EBT $ 175 Taxes (40%) 70 Net income $ 105

Sales $3,000 Operating costs excluding depreciation 2,450 EBITDA $ 550 Depreciation 250 EBIT $ 300 Interest 125 EBT $ 175 Taxes (40%) 70 Net income $ 105

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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At the end of last year, Roberts Inc. reported the following
income statement (in millions of dollars):

 

Looking ahead to the following year, the company’s CFO has assembled this information:
● Year-end sales are expected to be 10% higher than the $3 billion in sales generated
last year.
● Year-end operating costs, excluding depreciation, are expected to equal 80% of yearend
sales.
● Depreciation is expected to increase at the same rate as sales.
● Interest costs are expected to remain unchanged.
● The tax rate is expected to remain at 40%.
On the basis of that information, what will be the forecast for Roberts’ year-end net income?

Sales $3,000 Operating costs excluding depreciation 2,450 EBITDA $ 550 Depreciation 250 EBIT $ 300 Interest 125 EBT $ 175 Taxes (40%) 70 Net income $ 105
Transcribed Image Text:Sales $3,000 Operating costs excluding depreciation 2,450 EBITDA $ 550 Depreciation 250 EBIT $ 300 Interest 125 EBT $ 175 Taxes (40%) 70 Net income $ 105
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