Question
Edmonds Industries is forecasting the following income statement: Sales $6,000,000 Operating costs excluding depreciation & amortization 3,300,000 EBITDA $2,700,000 Depreciation and amortization 900,000 EBIT $1,800,000
Edmonds Industries is forecasting the following income statement:
Sales | $6,000,000 |
Operating costs excluding depreciation & amortization | 3,300,000 |
EBITDA | $2,700,000 |
Depreciation and amortization | 900,000 |
EBIT | $1,800,000 |
Interest | 600,000 |
EBT | $1,200,000 |
Taxes (25%) | 300,000 |
Net income | $900,000 |
The CEO would like to see higher sales and a forecasted net income of $1,400,000. Assume that operating costs (excluding depreciation and amortization) are 55% of sales and that depreciation and amortization and interest expenses will increase by 10%. The tax rate, which is 25%, will remain the same. (Note that while the tax rate remains constant, the taxes paid will change.) What level of sales would generate $1,400,000 in net income? Round your answer to the nearest dollar, if necessary.
$ ______
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