XYZ Plumbing - Income Statement Assumptions 2021 2022 2022 - 2023 2023E Revenue $10,000,000 100.0% $12,000,000 Revenue increases by 20% ($ basis) $14,400,000 CGS 4,500,000 45.0% 5,340,000 Gross Profit $5,500,000 55.0% $6,660,000 Gross MARGIN increases by 0.5% SG&A 2,000,000 20.0% 2,280,000 SG&A improves by 0.5% (% basis) R&D 1,000,000 10.0% 1,100,000 R&D increases by 15% ($ basis) Deprec & Amort 500,000 5.0% 500,000 No change in Deprec & Amort cost Total Op. Expense 3,500,000 35.0% 3,880,000 Operating Profit $2,000,000 20.0% $2,780,000 Interest cost 805,000 8.1% 875,000 Interest costs are given 875,000 Interest income 60,000 0.6% 60,000 Interest income is given 120,000 Pre-Tax $1,255,000 12.6% $1,965,000 Tax (21%) 263,550 21.0% 412,650 See D22 Net Income $991,450 9.9% $1,552,350 EPS - Basic $0.10 $0.16 EPS - Diluted Average Shares Outstanding 10,000,000 10,000,000 10,000,000 Diluted Shares