(Using common-size financial statements) The S&H Construction Company expects to have sales next year totaling $14,900,000. In addition, the firm pays taxes at 21 percent and will owe $290,000 in interest expense. Based on last year's operations, the firm's management predicts that its cost of goods sold will be 58 percent of sales and operating expenses will total 31 percent. What is your estimate of the firm's net income (after taxes) for the coming year?
We will use the given projected data and the percentages of the different expenses with respect to the projected sales to construct the pro-forma income statement.
Complete the pro-forma income statement below: (Round to the nearest dollar.)
Pro-Forma Income Statement
Sales $14,900,000
Cost of goods sold
Gross profit
Operating expenses (4,619,000)
Net operating income
Interest expense (290,000)
Earnings before taxes
Taxes
Net income
