Question

Listed below is the 2018 income statement for Tom and Sue Travels, Inc TOM AND SUE TRAVELS, INGC Income Statement for Year Ending December 31, 2018 (in millions of dollars) Net sales Less: Cost of goods sold Gross profits Less: Other operating expenses Earnings before interest, taxes, $19.800 9.100 $10.700 4.200 depreciation, and amortization (EBITDA) Less: Depreciation Earnings before interest and taxes (EBIT) Less Interest Earnings before taxes (EBT) Less: Taxes Net income 6.500 3.900 2.600 0.845 $ 1.75!5 0.655 1.100 The CEO of Tom and Sue's wants the company to earn a net income of $3.570 million in 2019. Cost of goods sold is expected to be 50 percent of net sales, depreciation and other operating expenses are not expected to change, interest expense is expected to increase to $0.945 million, and the firm's tax rate will be 30 percent. Calculate the net sales needed to produce net income of $3.570 million. (Enter your answer in millions of dollars rounded to 3 decimal places.) Net sales million

Answer 1

Net sales(100%)(balance)(14.145/0.5)	$28.29 million
Less:cost of goods sold(0.5*Net sales)	$14.145 million
Gross profit(50%)(9.945+4.2)	14.145 million
Less:Other operating expenses	4.2 million
EBITDA(6.045+3.9)	9.945 million
Less:Depreciation	3.9 million
EBIT(5.1+0.945)	6.045 million
Less:interest	0.945 million
EBT(100%)(3.57/0.7)	5.1 million
Less:tax@30%(5.1*0.3)	1.53 million
Net income(70%)	3.57 million