Question
In: Accounting
Please fill out chat. What is forecast for netincome in 2016 ? ASSUMPTIONS Sales Price per...
| Please fill out chat. What is forecast for netincome in 2016 ? | |||||
| ASSUMPTIONS | |||||
| Sales Price per Unit | $49.99 | ||||
| Gross Margin = (Revenues - cost of goods sold) / Revenues | 25% | ||||
| Depreciation & amortization as a % of capital expenditures | 25% | ||||
| Tax Rate | 35% | ||||
| Year | 2014 | 2015 | 2016 | 2017 | 2018 |
| Units Sold | 200,000 | ||||
| Growth Rate Of Unit Sold | 5% | 13% | 15% | 9% | |
| Operating Expenses as % of Sales (2014 Only) | 10% | ||||
| Operating Expense Growth Rate | 4% | 4% | 4% | 4% | |
| Capital Expenditures | $1,750,000 | $1,775,000 | $1,800,000 | $1,825,000 | $1,850,000 |
| Interest Expense | $0 | $10,000 | $10,000 | $10,000 | $12,500 |
| Income Statement | |||||
| Year | 2014 | 2015 | 2016 | 2017 | 2018 |
| Units Sold | 200,000 | 210,000 | 237,300 | 272,895 | 297,456 |
| Price per Unit | $49.99 | $49.99 | $49.99 | $49.99 | $49.99 |
| Revenue | 9,998,000 | 10,497,900 | 11,862,627 | 13,642,021 | 14,869,803 |
| Cost of goods sold | |||||
| Gross Profit (defined as Revenue - COGS) | |||||
| Operating Expenses | |||||
| Earnings Before Interest Taxes Depreciation And Amortization (Ebitda) | |||||
| EBITDA / Revenue (%) | |||||
| Depreciation and Amortization | |||||
| Operating Income (defined as EBITDA - Depreciation and Amortization) | |||||
| Interest Expense | |||||
| Pre-tax Net Income (Operating Income - Interest Expense) | |||||
| Income Taxes | |||||
| Net Income (Pret-tax Net Income - Income Taxes) | |||||
Solutions
Expert Solution
Income Statement :-
| Particulars | 2014 | 2015 | 2016 | 2017 | 2018 |
| Units Sold | 200000 | 210000 | 237300 | 272895 | 297456 |
| Price Per Unit | $49.99 | $49.99 | $49.99 | $49.99 | $49.99 |
| Revenue | $9998000 | $10497900 | $11862627 | $13642021 | $14869825 |
| Less : Cost of Goods sold | $7498500 | $7873425 | $8896970 | $10231516 | $11152369 |
| Gross Profit @25% | $2499500 | $2624475 | $2965657 | $3410505 | $3717456 |
| Less : Operating Expenses | $999800 | $1039792 | $1081384 | $1124639 | $1169625 |
| EBITDA | $1499700 | $1584683 | $1884273 | $2285866 | $2547831 |
| EBITDA/Revenue(%) | 15% | 15.095% | 15.88% | 16.76% | 17.13% |
| Less : Depreciation | $437500 | $443750 | $450000 | $456250 | $462500 |
| Operating Income | $1062200 | $1140933 | $1434273 | $1829616 | $2085331 |
| Less : Interest Expense | $0 | $10000 | $10000 | $10000 | $12500 |
| Pre Tax Net Income | $1062200 | $1130933 | $1424273 | $1819616 | $2072831 |
| Less : Tax @ 35% | $371770 | $395827 | $498496 | $636866 | $725491 |
| Net Income | $690430 | $735106 | $925777 | $1182750 | $1347340 |
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