Question
In: Finance
You have developed the following pro forma income statement for your corporation: LOADING.... It represents the...
You have developed the following pro forma income statement for your corporation: LOADING.... It represents the most recent year's operations, which ended yesterday. Your supervisor in the controller's office has just handed you a memorandum asking for written responses to the following questions:
a. If sales should increase by 25 percent, by what percent would earnings before interest and taxes and net income increase?
b. If sales should decrease by 25 percent, by what percent would earnings before interest and taxes and net income decrease?
c. If the firm were to reduce its reliance on debt financing such that interest expense were cut in half, how would this affect your answers to parts a and b?
|
Sales |
$ |
45,750,000 |
|
Variable costs |
(22,800,000) |
|
|
Revenue before fixed costs |
$ |
22,950,000 |
|
Fixed costs |
(9,200,000) |
|
|
EBIT |
$ |
13,750,000 |
|
Interest expense |
(1,350,000) |
|
|
Earnings before taxes |
$ |
12,400,000 |
|
Taxes (50%) |
(6,200,000) |
|
|
Net income |
$ |
6,200,000 |
Solutions
jeff jeffy answered 11 months agoRelated Solutions
CASH BUDGET & PRO FORMA INCOME STATEMENT You are given the following information for the Thib’s...
CASH BUDGET & PRO FORMA INCOME
STATEMENT
You are given the following information for the Thib’s Oil
Service Company:
Actual Sales 3rd
QTR
Estimated Sales 4th QTR
July
$1,200,000
Oct.
$3,000,000
Aug.
$1,400,000
Nov. $5,000,000
Sept.
$1,600,000
Dec.
$7,000,000
******************************************************************
Actual Purchases 3rd
QTR
Estimated Purchases 4th QTR
July
$1,000,000
Oct.
$3,000,000
Aug.
$1,500,000
Nov. $4,000,000
Sept.
$2,000,000
Dec.
$1,000,000
__________________________________________________________________
One-half (50 percent) of the sales each month are...
• Describe pro forma income and the importance of pro forma income in the evaluation of...
• Describe pro forma income and the importance of pro forma
income in the evaluation of the income statement. Choose at least
two items that are excluded from pro forma income. Suggest to
management why including the items would be misleading to investors
and creditors.
(Break-even analysis) You have developed the income statement in the popup window, LOADING... , for the...
(Break-even analysis) You have developed the income statement
in the popup window, LOADING... , for the Hugo Boss Corporation.
It represents the most recent year's operations, which ended
yesterday. Your supervisor in the controller's office has just
handed you a memorandum asking for written responses to the
following questions: a. What is the firm's break-even point in
sales dollars? b. If sales should increase by 40 percent, by what
percent would earnings before taxes (and net income)
increase?
data table...
(Break-even analysis) You have developed the income statement in the popup window, LOADING... , for the...
(Break-even analysis) You have developed the income statement
in the popup window, LOADING... , for the Hugo Boss Corporation.
It represents the most recent year's operations, which ended
yesterday. Your supervisor in the controller's office has just
handed you a memorandum asking for written responses to the
following questions: a. What is the firm's break-even point in
sales dollars? b. If sales should increase by 30 percent, by what
percent would earnings before taxes (and net income)
increase?
Sales 51,853,438...
(Break-even analysis) You have developed the income statement in the popup window, LOADING... , for the...
(Break-even
analysis)
You have developed the income statement in the popup
window,
LOADING...
, for the Hugo Boss Corporation. It represents the most recent
year's operations, which ended yesterday. Your supervisor in the
controller's office has just handed you a memorandum asking for
written responses to the following questions:
a. What is the firm's break-even point in sales dollars?
b. If sales should increase by 35 percent, by what percent
would earnings before taxes (and net income) increase?
a. What...
PRO FORMA INCOME STATEMENT Austin Grocers recently reported the following 2016 income statement (in millions of...
PRO FORMA INCOME STATEMENT
Austin Grocers recently reported the following 2016 income
statement (in millions of dollars):
Sales
$700
Operating costs including
depreciation
500
EBIT
$200
Interest
40
EBT
$160
Taxes (40%)
64
Net income
$96
Dividends
$32
Addition to retained earnings
$64
For the coming year, the company is forecasting a 15% increase
in sales, and it expects that its year-end operating costs,
including depreciation, will equal 65% of sales. Austin's tax rate,
interest expense, and dividend payout ratio...
You have developed the following analytical profit and loss statement for your company. It represents the...
You have developed the following analytical profit and loss
statement for your company. It represents the most recent year’s
operations, which ended yesterday.
Sales
$45,750,000
Variable costs
22,800,000
Revenue before fixed costs
$
22,950,000
Fixed costs
9,200,000
Earnings before interest and taxes (EBIT)
13,750,000
Interest expense
1,350,000
Earnings before taxes
$
12,400,000
Taxes (50%)
6,200,000
Net income
$ 6,200,000
Required
Your supervisor in the controller’s office has just handed you a
memo asking for written responses to the following questions:...
Which of the following budgeted pro forma financial statements is prepared first? A. Pro forma statement...
Which of the following budgeted pro forma financial statements
is prepared first?
A. Pro forma statement of cash flows
B. Pro forma income statement
C .Pro forma balance sheet
D. May be prepared in any order
explain why please
prepare a 3-year pro forma income statement and pro forma balance sheet, including expected cash flows...
prepare a 3-year pro forma income statement and pro forma
balance sheet, including expected cash flows and all associated
assumptions.
Company: Bishrom (Nepali eyewear brand) outsources all the
manufacturing in china.
Please assume all the data. you can make a fake statement.
Subject: Entrepreneurial finance
Pro forma income statement. Given the income statement in the popup window, for California Cement Company...
Pro forma income statement. Given the income statement
in the popup window, for California Cement Company for 2013 and an
expected sales growth rate of 6.61 % for 2014, prepare a pro forma
income statement for 2014.
First, find the percentage of each income statement line from
2013 as a percent of sales. (Round to three decimal places.)
Sales Revenue $22,811,000 ____ %
Cost of goods sold $-11,638,000 ___%
Selling, general, and administrative expenses $-3,973,000
____%
Depreciation expenses $ -1,369,000...
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