(Using common-size financial statements) The S&H Construction Company expects to have total sales next year totaling $14,800,000. In addition, the firm pays taxes at 35 percent and will owe$307,000 in interest expense. Based on last year's operations the firm's management predicts that its cost of goods sold will be 62 percent of sales and operating expenses will total 33 percent. What isyour estimate of the firm's net income (after taxes) for the coming year?Pro-Forma Income StatementSalesCost of goods soldGross profitOperating expensesNet operating incomeInterest expenseEarnings before taxesTaxesNet income$$$$14800000(9424000)5376000(4884000)(307000)(5180000)

calculation of cost of goods sold = 62% of 14800000 = $ 9176000 calculation of sales and operating…

Pro-Forma Income Statement Sales Cost of goods sold Gross profit Operating expenses Net operating income Interest expense Earnings before taxes Taxes Net income $ S S 14800000 (9424000) 5376000 (4884000) (307000) (5180000)

Pro-Forma Income Statement Sales Cost of goods sold Gross profit Operating expenses Net operating income Interest expense Earnings before taxes Taxes Net income $ S S 14800000 (9424000) 5376000 (4884000) (307000) (5180000)

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter6: Accounting For Financial Management

Section: Chapter Questions

Problem 11P: The Berndt Corporation expects to have sales of 12 million. Costs other than depreciation are...

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