NEW MyLab Finance with Pearson eText -- Access Card -- for Fundamentals of Corporate Finance
NEW MyLab Finance with Pearson eText -- Access Card -- for Fundamentals of Corporate Finance
3rd Edition
ISBN: 9780133543889
Author: Jonathan Berk, Peter DeMarzo, Jarrad Harford
Publisher: PEARSON
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Chapter 20, Problem 1CQ

Based on the forecasts in this case, use the following spreadsheet to construct a pro forma income statement for Idexo over the next five years. What is the annual growth rate of the firm’s net income over this period?

    1 Year 2016 2017 2018 2019 2020 2021
    2 Income Statement ($000s)
    3 Sales 100,000
    4 Cost of Goods Sold -45,333
    5 Gross Profit 54,667
    6 Sales and Marketing -15,000
    7 Administration -18,000
    8 EBITDA 21,667
    9 Depreciation -6,667
    10 EBIT 15,000
    11 Interest Expense (net) -1,021
    12 Pretax Income 13,979
    13 Income Tax -4,893
    14 Net Income 9,086

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