Problem 17-7 Pro forma income statement At the end of last year, Roberts Inc. re
ID: 2383256 • Letter: P
Question
Problem 17-7
Pro forma income statement
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 70% 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? Enter your answer in millions. For example, an answer of $25,000,000 should be entered as 25. Round your answer to two decimal places.
$ _____ million
Sales $3,000 Operating costs excluding depreciation 2,450 EBITDA $550 Depreciation 250 EBIT $300 Interest 125 EBT $175 Taxes (40%) 70 Net income $105Explanation / Answer
Answer:$ 354 million
Particulars Amount(in millions of $) Sales 3300 Less: Operating costs excluding depreciation 2310 EBITDA 990 Less:Dep 275 EBIT 715 Less: Interest 125 EBT 590 Less:Taxes@40% 236 Net income 354