Home / Questions / Income Statement Hermann Industries is forecasting the following incomestatement: Sales
Income Statement
Hermann Industries is forecasting the following incomestatement:
|
Sales |
$8,000,000 |
|
Operating costs excludingdepreciation & amortization |
4,400,000 |
|
EBITDA |
$3,600,000 |
|
Depreciation and amortization |
800,000 |
|
EBIT |
$2,800,000 |
|
Interest |
480,000 |
|
EBT |
$2,320,000 |
|
Taxes (40%) |
928,000 |
|
Net income |
$1,392,000 |
The CEO would like to see higher sales and a forecasted netincome of $2,714,400. Assume that operating costs (excludingdepreciation and amortization) are 55% of sales and thatdepreciation and amortization and interest expenses will increaseby 13%. The tax rate, which is 40%, will remain the same. Whatlevel of sales would generate $2,714,400 in net income? Ifnecessary, round your answer to the nearest dollar at the end ofthe calculations.
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