Corporate Valuation and Financial Planning: Forecasted Financial Statements

forecasting its

statements ultimately can be used to improve the firm's operations.

Quantitative Problem: At the end of last year, Edwin 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 $6\%$ higher than $$4\mathrm{.}11$ 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 $25\%.$

calculations. Round your answers to two decimal places.

Edwin Inc.

Income Statement

Sales

Operating costs $($excluding depreciation$)$

EBITDA

Depreciation

EBIT

Interest

EBT

Taxes $(25\%)$

Net income

$($in millions of dollars$)$

$

$

$

$

$