Question
At the end of last year, Edwin Inc. reported the following income statement (in millions of dollars): Sales $4,190.00 Operating costs (excluding depreciation) 3,060.00 EBITDA
At the end of last year, Edwin Inc. reported the following income statement (in millions of dollars):
Sales | $4,190.00 |
Operating costs (excluding depreciation) | 3,060.00 |
EBITDA | $1,130.00 |
Depreciation | 325.00 |
EBIT | $805.00 |
Interest | 140.00 |
EBT | $665.00 |
Taxes (40%) | 266.00 |
Net income | $399.00 |
Looking ahead to the following year, the company's CFO has assembled this information:
- Year-end sales are expected to be 6% higher than $4.19 billion in sales generated last year.
- Year-end operating costs, excluding depreciation, are expected to increase at the same rates as sales.
- Depreciation costs are 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 this information, what will be the forecast for Edwin's year-end net income? Enter your answers as positive values. Enter your answers in millions. For example, an answer of $10,550,000 should be entered as 10.55. Do not round intermediate calculations. Round your answers to two decimal places.
Edwin Inc. Income Statement (in millions of dollars)
Sales$
Operating costs (excluding depreciation)
EBITDA$
Depreciation
EBIT$
Interest
EBT$
Taxes (40%)
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