This forecasting approach means that we're assuming that relationships between certain accounts stay the same, hence a 20% increase for each related account! Historical Projected 2021 2022 Sales $10,000,000 Cost of goods Sold $4,000,000 Gross Profit $6,000,000 Selling & Admin. Expenses $800,000 Depreciation Expense $2,000,000 Operating Income (EBIT) $3,200,000 Interest Expenses $1,350,000 Earnings Before Tax (EBT) $1,850,000 Income Tax (40%) $740,000 Net Income (NI) $1,110,000 Common Stock Dividends paid $400,000 Addition to Retained Earnings $710,000 Earnings per Share (1,000,000 shares) $1.11