Cold Goose Metal Works Inc.'s income statement reports data for its first year of operation. The...

  

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Cold Goose Metal Works Inc.'s income statement reports data for its first year of operation. The firm's CEO would like sales to increase by 25% next year. 1. Cold Goose is able to achieve this level of increased sales, but its interest costs increase from 10% to 15% of earnings before interest and taxes (EBIT). 2. The company's operating costs (excluding depreciation and amortization) remain at 80% of net sales, and its depreciation and amortization expenses remain constant from year to year. 3. The company's tax rate remains constant at 40% of its pre-tax income or earnings before taxes (EBT). 4. In Year 2, Cold Goose expects to pay $300,000 and $1,445,850 of preferred and common stock dividends, respectively. Cold Goose Metal Works Inc. Income Statement For Year Ending December 31 Year 1 $30,000,000 24,000,000 1,200,000 $4,800,000 480,000 4,320,000 1,728,000 $2,592,000 300,000 2,292,000 1,166,400 $1,125,600 Net sales Less: Operating costs, except depreciation and amortization Less: Depreciation and amortization expenses Operating income (or EBIT) Less: Interest expense Pre-tax income (or EBT) Less: Taxes (40%) Earnings after taxes Less: Preferred stock dividends Earnings available to common shareholders i Less: Common stock dividends Contribution to retained earnings. Year 2 (Forecasted) $ Given the results of the previous income statement calculations, complete the following statements: Given the results of the previous income statement calculations, complete the following statements: • In Year 2, if Cold Goose has 25,000 shares of preferred stock issued and outstanding, then each preferred share should expect to receive in annual dividends. • If Cold Goose has 200,000 shares of common stock issued and outstanding, then the firm's earnings per share (EPS) is expected to change from in Year 1 to in Year 2. in Year 1 to: • Cold Goose's before interest, taxes, depreciation and amortization (EBITDA) value changed from in Year 2. . It is to say that Cold Goose's net inflows and outflows of cash at the end of Years 1 and 2 are equal to the company's annual contribution to retained earnings. This is becaus of the item reported in the income statement involve payments and receipts of cash. Cold Goose Metal Works Inc.'s income statement reports data for its first year of operation. The firm's CEO would like sales to increase by 25% next year. 1. Cold Goose is able to achieve this level of increased sales, but its interest costs increase from 10% to 15% of earnings before interest and taxes (EBIT). 2. The company's operating costs (excluding depreciation and amortization) remain at 80% of net sales, and its depreciation and amortization expenses remain constant from year to year. 3. The company's tax rate remains constant at 40% of its pre-tax income or earnings before taxes (EBT). 4. In Year 2, Cold Goose expects to pay $300,000 and $1,445,850 of preferred and common stock dividends, respectively. Cold Goose Metal Works Inc. Income Statement For Year Ending December 31 Year 1 $30,000,000 24,000,000 1,200,000 $4,800,000 480,000 4,320,000 1,728,000 $2,592,000 300,000 2,292,000 1,166,400 $1,125,600 Net sales Less: Operating costs, except depreciation and amortization Less: Depreciation and amortization expenses Operating income (or EBIT) Less: Interest expense Pre-tax income (or EBT) Less: Taxes (40%) Earnings after taxes Less: Preferred stock dividends Earnings available to common shareholders i Less: Common stock dividends Contribution to retained earnings. Year 2 (Forecasted) $ Given the results of the previous income statement calculations, complete the following statements: Given the results of the previous income statement calculations, complete the following statements: • In Year 2, if Cold Goose has 25,000 shares of preferred stock issued and outstanding, then each preferred share should expect to receive in annual dividends. • If Cold Goose has 200,000 shares of common stock issued and outstanding, then the firm's earnings per share (EPS) is expected to change from in Year 1 to in Year 2. in Year 1 to: • Cold Goose's before interest, taxes, depreciation and amortization (EBITDA) value changed from in Year 2. . It is to say that Cold Goose's net inflows and outflows of cash at the end of Years 1 and 2 are equal to the company's annual contribution to retained earnings. This is becaus of the item reported in the income statement involve payments and receipts of cash.

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Answer lets start by completing the missing values in the question Cold Goose Metal Works Inc Income Statement For Year Ending December 31 Item Year 1 Year 2 Forecasted Net sales 30000000 37500000 Les... View the full answer