Sales Data Market Size (000 units) Market Share Average Sales Price ($/unit) Cost of Goods Data...

     

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Sales Data Market Size (000 units) Market Share Average Sales Price ($/unit) Cost of Goods Data Raw Materials ($/unit) Direct Labor Costs ($/unit) Operating Expense Data Sales and Marketing (% sales) Administrative (% sales) Interest on Term Loan ($ 000) Growth 5% 0.5% 2% 1% 4% 2005 16.0000 18.0000 15.0 2006 18 (75) 10,000 10,500 11,025 11,576.25 10.00% 10.50% 11.00% 11.50% 75.0000 76.5000 78.0300 79.5906 2007 16.1600 16.3216 18.7200 19.4688 16.5 15 (6,800) 18.0 Year 15 (6,800) 2008 16.4848 20.2476 19.5 14 (6,800) 2009 12,155.06 12.00% 81.1824 16.6497 21.0575 20.0 13 (6,800) 2010 12,762.81 12.50% 82.8061 16.8162 21.8998 20.0 13 (6,800) TABLE 19.7 SPREADSHEET Pro Forma Income Statement for Ideko, 2005-2010 Income Statement ($ 000) 1 Sales 2 Cost of Goods Sold 3 Raw Materials 4 Direct Labor Costs 5 Gross Profit 6 Sales and Marketing 7 Administrative 8 EBITDA 9 Depreciation 10 EBIT 11 Interest Expense (net) 12 Pretax Income 13 Income Tax 14 Net Income Year 2005 75,000 2006 2007 2008 2009 2010 88,358 103,234 119,777 138,149 158,526 (16,000) (18,665) (21,593) (24,808) (28,333) (32,193) (18,000) (21,622) (25,757) (30,471) (35,834) (41,925) 41,000 48,071 55,883 64,498 73,982 84,407 (11,250) (14,579) (18,582) (23,356) (27,630) (31,705) (13,500) (13,254) (15,485) (16,769) (17,959) (20,608) 16,250 20,238 21,816 24,373 28,393 32,094 (5,500) (5,450) (5,405) (6,865) (7,678) (7,710) 10,750 14,788 16,411 17,508 20,715 24,383 (6,800) (6,800) (7,820) (8,160) (75) (6,800) 10,675 7,988 9,611 10,708 12,895 16,223 (3,736) (2,796) (3,364) (3,748) (4,513) (5,678) 6,939 5,193 6,247 6,960 8,382 10,545 To build the pro forma income statement, we begin with Ideko's sales. (Round to the nearest $ 000.) Income Statement ($ 000) Sales Income Statement ($ 000) Direct Labor Costs 2005 Income Statement ($ 000) Gross Profit 75,000 The next items in the income statement detail the cost of goods sold. (Round to the nearest $ 000.) Income Statement ($ 000) Raw Materials The same method can be applied to determine the direct labor costs. (Round to the nearest $ 000.) 2005 (16,000) Income Statement ($ 000) Sales and Marketing 2005 2006 (18,000) Gross profit is calculated next. (Round to the nearest $ 000.) 2005 2006 2005 (11,250) 2006 2007 2006 2006 2007 2007 2008 2007 2007 2008 2008 2009 2008 2008 2009 2009 2009 41,000 Sales, marketing, and administrative costs can be computed directly as a percentage of sales. (Round to the nearest $ 000.) 2010 2009 2010 2010 2010 2010 Income Statement ($ 000) 2005 (13,500) Next, we can project EBITDA over the next five years. (Round to the nearest $ 000.) Administrative Income Statement ($ 000) EBITDA Income Statement ($ 000) EBIT Next, we deduct interest expenses. Income Statement ($ 000) Pretax Income 2005 Income Statement ($ 000) Income Tax 2005 2005 2006 10,675 16,250 Next, we arrive at Ideko's earnings before interest and taxes. (Round to the nearest $ 000.) 2006 2005 (3,736) 2006 10,750 (Round to the nearest $ 000.) 2007 2006 2007 2006 2007 2008 2007 The final expense is the corporate income tax. (Round to the nearest $ 000.) 2008 2007 2008 2008 2009 2008 2009 2009 2009 2009 2010 2010 2010 2010 2010 After income taxes, we are left with Ideko's projected pro forma net income as the bottom line. (Round to the nearest $ 000.) Income Statement ($ 000) Net Income 2005 6,939 2006 2007 2008 2009 2010 Sales Data Market Size (000 units) Market Share Average Sales Price ($/unit) Cost of Goods Data Raw Materials ($/unit) Direct Labor Costs ($/unit) Operating Expense Data Sales and Marketing (% sales) Administrative (% sales) Interest on Term Loan ($ 000) Growth 5% 0.5% 2% 1% 4% 2005 16.0000 18.0000 15.0 2006 18 (75) 10,000 10,500 11,025 11,576.25 10.00% 10.50% 11.00% 11.50% 75.0000 76.5000 78.0300 79.5906 2007 16.1600 16.3216 18.7200 19.4688 16.5 15 (6,800) 18.0 Year 15 (6,800) 2008 16.4848 20.2476 19.5 14 (6,800) 2009 12,155.06 12.00% 81.1824 16.6497 21.0575 20.0 13 (6,800) 2010 12,762.81 12.50% 82.8061 16.8162 21.8998 20.0 13 (6,800) TABLE 19.7 SPREADSHEET Pro Forma Income Statement for Ideko, 2005-2010 Income Statement ($ 000) 1 Sales 2 Cost of Goods Sold 3 Raw Materials 4 Direct Labor Costs 5 Gross Profit 6 Sales and Marketing 7 Administrative 8 EBITDA 9 Depreciation 10 EBIT 11 Interest Expense (net) 12 Pretax Income 13 Income Tax 14 Net Income Year 2005 75,000 2006 2007 2008 2009 2010 88,358 103,234 119,777 138,149 158,526 (16,000) (18,665) (21,593) (24,808) (28,333) (32,193) (18,000) (21,622) (25,757) (30,471) (35,834) (41,925) 41,000 48,071 55,883 64,498 73,982 84,407 (11,250) (14,579) (18,582) (23,356) (27,630) (31,705) (13,500) (13,254) (15,485) (16,769) (17,959) (20,608) 16,250 20,238 21,816 24,373 28,393 32,094 (5,500) (5,450) (5,405) (6,865) (7,678) (7,710) 10,750 14,788 16,411 17,508 20,715 24,383 (6,800) (6,800) (7,820) (8,160) (75) (6,800) 10,675 7,988 9,611 10,708 12,895 16,223 (3,736) (2,796) (3,364) (3,748) (4,513) (5,678) 6,939 5,193 6,247 6,960 8,382 10,545 To build the pro forma income statement, we begin with Ideko's sales. (Round to the nearest $ 000.) Income Statement ($ 000) Sales Income Statement ($ 000) Direct Labor Costs 2005 Income Statement ($ 000) Gross Profit 75,000 The next items in the income statement detail the cost of goods sold. (Round to the nearest $ 000.) Income Statement ($ 000) Raw Materials The same method can be applied to determine the direct labor costs. (Round to the nearest $ 000.) 2005 (16,000) Income Statement ($ 000) Sales and Marketing 2005 2006 (18,000) Gross profit is calculated next. (Round to the nearest $ 000.) 2005 2006 2005 (11,250) 2006 2007 2006 2006 2007 2007 2008 2007 2007 2008 2008 2009 2008 2008 2009 2009 2009 41,000 Sales, marketing, and administrative costs can be computed directly as a percentage of sales. (Round to the nearest $ 000.) 2010 2009 2010 2010 2010 2010 Income Statement ($ 000) 2005 (13,500) Next, we can project EBITDA over the next five years. (Round to the nearest $ 000.) Administrative Income Statement ($ 000) EBITDA Income Statement ($ 000) EBIT Next, we deduct interest expenses. Income Statement ($ 000) Pretax Income 2005 Income Statement ($ 000) Income Tax 2005 2005 2006 10,675 16,250 Next, we arrive at Ideko's earnings before interest and taxes. (Round to the nearest $ 000.) 2006 2005 (3,736) 2006 10,750 (Round to the nearest $ 000.) 2007 2006 2007 2006 2007 2008 2007 The final expense is the corporate income tax. (Round to the nearest $ 000.) 2008 2007 2008 2008 2009 2008 2009 2009 2009 2009 2010 2010 2010 2010 2010 After income taxes, we are left with Ideko's projected pro forma net income as the bottom line. (Round to the nearest $ 000.) Income Statement ($ 000) Net Income 2005 6,939 2006 2007 2008 2009 2010

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