At the end of last year, Roberts Inc. reported the following income statement (i

Question

At the end of last year, Roberts Inc. reported the following income statement (in millions of dollars):

Looking ahead to the following year, the company's CFO has assembled this information:

On the basis of that information, what will be the forecast for Roberts' year-end net income? Enter your answer in millions. For example, an answer of $25,000,000 should be entered as 25. Round your answer to two decimal places.

$ million

Sales $3,000 Operating costs excluding depreciation 2,450 EBITDA $550 Depreciation 250 EBIT $300 Interest 125 EBT $175 Taxes (40%) 70 Net income $105

Explanation / Answer

Pro-forma income statement (forecast) Sales $3,300 (3000 x 110%) Operating costs excluding depreciation 2,640 (3300 x 80%) EBITDA $660 Depreciation $275 (250 x 110%) EBIT $385 Interest $125 EBT $260 Taxes (40%) $104 Net income $156 Robert's year-end net income is forecasted to be $156 Million.

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