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Click here to read the eBook: The Income Statement INCOME STATEMENT Patterson Brothers recently reported an EBITDA of $12.5 m

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Answer #1

EBITDA = $12,500,000

Less: Depreciation and Amortization = 6,500,000

EBIT = $6,000,000

Less: Interest Expense = $2,000,000

EBT = $4,000,000

Less: Taxes @35%= $1,400,000

Net Income = $2,600,000

Note EBT = 2,600,000/65% = $4,000,000

EBIT = EBT + Interest = 6,000,000

Depreciation and Amortization = EBITDA – EBIT = $12,500,000-$6,000,000

= $6,500,000

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