You are given the last year income statement for The Lumber Mill as follows: 2017 Income Statement,
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Question:
You are given the last year income statement for The Lumber Mill as follows:
2017 Income Statement, The Lumber Mill
Net Sales | $608,400 |
Cost of Goods Sold | 427,800 |
Depreciation | 79,100 |
EBIT | $101,500 |
Interest | 17,600 |
Taxable Income | $83,900 |
Taxes | 28,500 |
Net Income | $55,400 |
Dividends | $12,000 |
Assume that all costs and accounts payable change spontaneously with sales. For simplicity's sake, assume interest expense also changes spontaneously with sales (even though you know it may not). Fixed assets and depreciation do not vary with sales (assume they stay constant). The tax rate and dividend payout ratios remain constant. If the firm's managers project a firm growth rate of 22% for next year, can you project the pro forma income statement?
Related Book For
Horngrens Financial and Managerial Accounting
ISBN: 978-0133866292
5th edition
Authors: Tracie L. Nobles, Brenda L. Mattison, Ella Mae Matsumura
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