Question

Your pro forma income statement shows sales of $ 1 comma 023 comma 000​, cost of goods sold as $ 483 comma 000​, depreciation expense of $ 104 comma 000​, and taxes of $ 174 comma 400 due to a tax rate of 40 %. What are your pro forma​ earnings? What is your pro forma free cash​ flow? Complete the pro forma income statement​ below: ​(Round to the nearest​ dollar.)

Sales $

Cost of Goods Sold $

Gross Profit $

Depreciation $

EBIT $

Taxes (40%) $

Earnings $

Answer 1

This question require us to complete the pro forma income statement given in the question. The complete income statement pro forma is given below.

Sales $ $ 1,023,000

Cost of Goods Sold $ ($ 483,000)

Gross Profit $ $ 540,000

Depreciation $ ($ 104,000)

EBIT $ $ 436,000

Taxes (40%) $ ($ 174,400)

Earnings $ $ 261,600

Pro forma earning is 261,600.

Cash flow will be Earning + Depreciation = 261,000 + 104,000 = $ 365,000.