PRO FORMA INCOME STATEMENT At the end of last year, Roberts Inc. reported the following income statement (in millions of dollars):   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   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 year- end 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?

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Chapter15: Financial Statement Analysis
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PRO FORMA INCOME STATEMENT At the end of last year, Roberts Inc. reported the following income statement (in millions of dollars):


 

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

 

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 year- end 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?

 

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