Ask Question
25 May, 18:37

Your pro forma income statement shows sales of $ 965 comma 000 , cost of goods sold as $ 492 comma 000 , depreciation expense of $ 96 comma 000 , and taxes of $ 94 comma 250 due to a tax rate of 25 %. What are your pro forma earnings? What is your pro forma free cash flow?

+2
Answers (1)
  1. 25 May, 18:46
    0
    Answer and Explanation:

    The computation is shown below:

    For Proforma earnings

    Sales $965,000

    Less: Cost of Goods sold $492,000

    Gross Profit $473,000

    Less: Depreciation expense $96,000

    EBIT $377,000

    Less: Taxes $94,250

    Proforma Earnings $282,750

    Now the proforma free cash flow is

    = Proforma Earnings + depreciation expense

    = $282,750 + $96,000

    = $378,750

    We simply applied the above format and equation to determine each of the item
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “Your pro forma income statement shows sales of $ 965 comma 000 , cost of goods sold as $ 492 comma 000 , depreciation expense of $ 96 comma ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers