Year 1 Income Statement:

Sales: $11m

Operating costs (excl. depreciations & amortization): $4.5m

Depreciation and amortization: $1.5m

Interest: $0.7m

Net Income: $2.8m

Tax Rate: 35%*

Calculate EBITDA:

EBITDA = Net Profit + Interest +Taxes + Depreciation + Amortization

Net profit = 11,000,000 - 1,500,000 - 4,500,000

= 5M

5M + 700,000 Interest + 35% Tax rate+ 1.5M

Am I headed in the right direction?

Then I need to determine what level of sales would generate $3.3m in net income for the following year (Year 2), operating costs increased by 5% equals: 4,725,000 and tax rate of 35%.