forecasted balance sheet is calculated from asset ratios that management has reviewed and changed based on industry and benchmark averages. An Excel spreadsheet is used forthis analysis because changes in assumptions, financing, and ratios can be made to the statements to review alternative scenarios. The impact of these changes on the firm'sforecasted financial statements ultimately can be used to improve the firm's operations.Quantitative Problem: At the end of last year, Edwin Inc. reported the following income statement (in millions of dollars):SalesOperating costs excluding depreciationEBITDADepreciation$4,250.003,016.00$1,234.00320.00$914.00150.00$764.00305.60$458.40Looking ahead to the following year, the company's CFO has assembled this information:EBITInterestEBTTaxes (40%)Net income▪ Year-end sales are expected to be 4% higher than $4.25 billion in sales generated last year.▪ Year-end operating costs, excluding depreciation, will equal 80% of sales.■ Depreciation costs are expected to increase at the same rate as sales.■ Interest costs are expected to remain unchanged.■ The tax rate is expected to remain at 40%.On the basis of this information, what will be the forecast for Edwin's year-end net income? Enter your answers in millions. For example, an answer of $10,550,000 should beentered as 10.55. Enter all values as positive numbers. Do not round intermediate calculations. Round your answers to two decimal places.(in millions of dollars)$SalesOperating costs excluding depreciationEBITDADepreciationEBITInterestEBTTaxesNet income$$$$

Income Statement An accounting statement that depicts the profitability of the company is called as…

forecasted balance sheet is calculated from asset ratios that management has reviewed and changed based on industry and benchmark averages. An Excel spreadsheet is used this analysis because changes in assumptions, financing, and ratios can be made to the statements to review alternative scenarios. The impact of these changes on the firm's forecasted financial statements ultimately can be used to improve the firm's operations. Quantitative Problem: At the end of last year, Edwin Inc. reported the following income statement (in millions of dollars): Sales Operating costs excluding depreciation EBITDA Depreciation EBIT Interest EBT Taxes (40%) Net income $764.00 305.60 $458.40 Looking ahead to the following year, the company's CFO has assembled this information: $4,250.00 3,016.00 $1,234.00 320.00 $914.00 150.00 • Year-end sales are expected to be 4% higher than $4.25 billion in sales generated last year. Year-end operating costs, excluding depreciation, will equal 80% of sales. . Depreciation costs are expected to increase at the same rate as sales. . Interest costs are expected to remain unchanged. . The tax rate is expected to remain at 40%. On the basis of this information, what will be the forecast for Edwin's year-end net income? Enter your answers in millions. For example, an answer of $10,550,000 should be entered as 10.55. Enter all values as positive numbers. Do not round intermediate calculations. Round your answers to two decimal places. Sales Operating costs excluding depreciation EBITDA Depreciation EBIT Interest EBT Taxes Net income (in millions of dollars) $ $ $ $

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter9: Responsibility Accounting And Decentralization

Section: Chapter Questions

Problem 3PB: The income statement comparison for Rush Delivery Company shows the income statement for the current...