Answered step by step
Verified Expert Solution
Question
1 Approved Answer
At the end of last year, Edwin Inc. reported the following income statement (in millions of dollars): Sales $4,200 Operating costs excluding depreciation 3,044 EBITDA
At the end of last year, Edwin Inc. reported the following income statement (in millions of dollars):
Sales | $4,200 |
Operating costs excluding depreciation | 3,044 |
EBITDA | $1,156 |
Depreciation | 330 |
EBIT | $826 |
Interest | 130 |
EBT | $696 |
Taxes (40%) | 278 |
Net income | $418 |
Looking ahead to the following year, the company's CFO has assembled this information:
- Year-end sales are expected to be 6% higher than $4.2 billion in sales generated last year.
- Year-end operating costs, including depreciation, are expected to increase at the same rates as sales.
- Interest costs are expected to remain unchanged.
- The tax rate is expected to remain at 40%.
On the basis of this information, what will be the forecast for Edwin's year-end net income? Round your answer to the nearest whole million. Do not round intermediate calculations. Enter all values as positive numbers.
(in millions of dollars) | |
Sales | $ |
Operating costs including depreciation | |
EBITDA | $ |
Depreciation | |
EBIT | $ |
Interest | |
EBT | $ |
Taxes | |
Net income | $ |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started