The afn equation provides useful insights into the forecasting process, but this equation assumes that all of the firm's key ratios remain constant, which is not likely to hold true. consequently, it is useful to forecast the firm's financial statements. the firm begins with forecasting its -select-income statementcashflow statementcash budgetcorrect 1 of item 1 which then feeds into the firm's balance sheet. management looks at operating ratios and their relationship with industry and benchmark averages. the forecasted income statement begins with the prior year's income statement and is adjusted for the sales growth forecast. some inputs for the income statement are not under the firm's control - for example, tax and interest rates. the 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 for 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 $4,270operating costs excluding depreciation 3,029ebitda $1,241depreciation 315ebit $926interest 130ebt $796taxes (40%) 318net income $478looking ahead to the following year, the company's cfo has assembled this information: year-end sales are expected to be 4% higher than $4.27 billion in sales generated last year.year-end operating costs, including depreciation, are expected to increase at the same rates 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? round your answer to the nearest whole million. do not round intermediate calculations. enter all values as positive numbers.(in millions of dollars)sales $ operating costs including depreciation ebitda $ depreciation ebit $ interest ebt $ taxes net income $
Solved
Show answers
More tips
- F Family and Home How to Choose a Baby Stroller: Tips from Experienced Parents...
- H Health and Medicine 5 Simple Steps to Quit Smoking for Good...
- C Computers and Internet How to Download Videos from YouTube? Simple Steps to Download Any Content...
- H Health and Medicine What is the Normal Blood Sugar Level in a Healthy Person?...
- S Style and Beauty How to Get Rid of Acne: Scientifically Proven Methods...
- L Leisure and Entertainment How to Choose the Perfect Gift for Men on February 23rd?...
- C Computers and Internet How to Delete Your Account on Odnoklassniki...
- H Health and Medicine 10 Simple and Effective Tips on How to Lose Weight in a Week...
- F Food and Cooking What s the Best Rice for Cooking Plov?...
- F Family and Home How to Get Rid of Your Neighbors?...
Answers on questions: Business
- B Business Marketing communicators must be good at messages that take into account how the target audience them....
- B Business Big Wheel, Inc. collects 25% of its sales on account in the month of the sale and 75% in the month following the sale. Sales on account are budgeted to be $16,300 for...
- M Mathematics find all solutions of cosx-\sqrt(1-3cos^(2)x)=0 a. 60° + n360°, 300° + n360° b. 30° + n360°, 210° + n360° c. 30° + n360°, 330° + n360° d. 60° + n360°, 120° + n360°...
- E English In a certain company, there were five candidates running for President. After the votes were tallied, it turned out that Victor, like in the last election, finished in...
- B Business If oligopolistic firms banded together with the intention of acting like a monopoly, it would likely result in their being able to Group of answer choices...
- S Social Studies Es urgente helpme 1) Define los siguientes conseptos: - Gremio - Ayuntamiento - Ciudadano Responde las siguientes preguntas 1) ¿ De qué manera los burgueses rompieron...
- H History What caused the Mongol Empire to break into separate regions ruled by separate leaders? O Cities around the empire split away and became independent nations.O The economy...
- B Biology Which base should you immediately look at to see if our hypothesis about the genetic cause underlying the yellow-bodied phenotype is correct?...
- B Business 6. Assume that as of August 1, 3,000 units of flat panel displays have been produced and sold during the current year. Analysis of the domestic market indicates that...
- H History How would you describe the europeans in the time of imperialism?...
Ответ: