Projected Income Statement Jeff’s Really Cool Stuff

Assumptions Percentage of Gross Income before Tax to Revenue = 15%Percentage of Gross Income before Tax to Revenue = 15% My tax rate = 25%My tax rate = 25% Cost of Goods Sold = 40%Cost of Goods Sold = 40% Inventory Turnover - 37Inventory Turnover - 37

I want to have Net Income AFTER Tax of $60,000I want to have Net Income AFTER Tax of $60,000 Assumptions

Net Income After Tax $60,000 Calculations $60,000 divided by the inverse (I minus the tax rate expressed as a decimal) of the tax rate = $60,000 divided by 1 minus.25 = $60,000 divided by.75 = Gross Income Before Tax of $80,000 Tax (25%) $20,000 Gross Income Before Tax $80,000

Net Income After Tax $60,000 Calculations Tax (25%) $20,000 Gross Income Before Tax $80,000 Revenue $? = 15%

Net Income After Tax $60,000 Calculations Tax (25%) $20,000 Gross Income Before Tax $80,000 Revenue $ $80,000 divided by the Percentage of Net Income before Tax to Revenue = $80,000 divided by.15 = $533, ,334

Net Income After Tax $60,000 Calculations Tax (25%) $20,000 Gross Income Before Tax $80,000 Revenue $ 533,334 Cost of Goods Sold $213,334 Cost of Goods Sold = 40%, so.4 times $533,334 = $213,334

Net Income After Tax $60,000 Calculations Tax (25%) $20,000 Gross Income Before Tax $80,000 Revenue $ 533,334 Cost of Goods Sold $213,334 Gross Profit $320,000 Operating Expenses $? $240,000

Calculations Revenue $ 533,334 Cost of Goods Sold $213,334 Inventory Turnover ratio = 37 Inventory Turnover ratio = Cost of Goods Sold divided by Average Inventory (Beginning Inventory plus Ending Inventory) divided by 2

Calculations Revenue $ 533,334 Cost of Goods Sold $213,334 $213,334 divided by $? = 37 $213,334 divided by 37 = Ave Inven $213,334 divided by 37 = $5,766 Beginning Inv $5,766

Calculations Revenue $ 533,334 Cost of Goods Sold $213,334 Beginning Inv $5,766 Purchases $213,334 GAS $219,100 Ending Inv $5,766