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Projected Income Statement

Projected Income Statement. Jeff’s Really Cool Stuff. Assumptions. Percentage of Gross Income before Tax to Revenue = 15% My tax rate = 25% Cost of Goods Sold = 40% Inventory Turnover - 37. Assumptions. I want to have Net Income AFTER Tax of $60,000. Calculations.

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Projected Income Statement

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  1. Projected Income Statement Jeff’s Really Cool Stuff

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

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

  4. Calculations Net Income After Tax $60,000 $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 Gross Income Before Tax $80,000 Tax (25%) $20,000

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

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

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

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

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

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

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

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