Question

Need help accurately getting this income before taxes. This is my pro-forma income statement vs USAT's actual income statement:

2014 35.940 42.345 58.078 77.408 104.093 18.57822.387 37.177 50.84872.847 2012 2013 2015 2016 2017e 2018e 2019e 10 Sales Cost of Sales 12 Gross Profit 13 17.362 19.958 20.901 26.560 31.246 25.384 5.618 0.244 SG&A 11.74114.036 16.451 20.473 5.222 0.865 15 Depreciation 4.580 5.486 5.731 16 Operating Profit 1.042 0.436 -1.282 18 19 20 21 22 Interest Expense 23 Income Before Taxes 24 25 26 NI before extraordinary item 27 28 Loss(gain) Extraordinary Charge 29 Reported Net Incom 30 31 Shares Outstanding 32 Depreciation EBITDA 4.580 5.621 5.486 5.922 5.731 4.449 5.222 6.087 5.618 5.862 0.149 -0.257 1.191 0.302 0.980 -0.6 0.892 1.136 0.693 1.465 0.087 1.049 Income Tax 0.028 27.255 0.2891 -0.615 1.16327.949-1.269 2.080 0 0 0 0 0

It's supposed to look similar for my estimates but everything takes a bad turn once I get to "income before taxes". 2nd image is a part of USAT's annual income statement.

Isn't "income before taxes" and "pretax income" the same? If so, what am I doing wrong that doesn't allow me to reach the same answers? It's supposed to be as simple as Row 16 minus Row 22 but that isn't working at all. Please respond ASAP, if possible.

Answer 1

The EBIT and Operating Profit are same in proforma income statement and USAT income statement.

As per the second image

Pretax income = EBIT - Unsual expenses + Interest expenses - Non operating expenses income

As per first image

Income before taxes = EBIT/Operating profit - Interest expenses

Due to above difference in formulas for calculation the pretax income and Income before taxes are not same.