In: Finance
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 30% increase in sales, and it expects that its year-end operating costs, including depreciation, will equal 60% of sales. Austin's tax rate, interest expense, and dividend payout ratio are all expected to remain constant.
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