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Samson's Sailboats Inc. recently reported the following income statement (in millions of dollars):
Samson's Sailboats Inc. recently reported the following income statement (in millions of dollars):
2018
Sales $3,500
Operating costs 2,500
EBIT $1,000
Interest 200
EBT $800
Taxes (40%) 320
Net income $ 480
Dividends (40%) $
Addition to retained earnings $
This year the company is forecasting a 40% increase in sales, and it expects that its year end operating costs will decline to 60% of sales. Samson's tax rate, interest expense, and dividend payout ratio are all expected to remain constant.
What is Samson's projected 2019 Net Income?
What is the projected 2019 paid out Dividend?
What is the forecasted addition to Retained Earnings to 2019?
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Kenney Corporation recently reported the following income statement for 2013 (numbers are in millions of dollars):
2018 2019
Sales $ 7,000
Operating costs 3,000
EBIT $ 4,000
Interest 200
Earnings before taxes (EBT) $ 3,800
Taxes (40%) 1,520
Net income available to common shareholders $ 2,280
The company forecasts that its sales will increase by 10% in 2019 and its operating costs will increase in proportion to sales. The company's interest expense is expected to remain at $200 million, and the tax rate will remain at 40%. The company plans to pay out 50% of its net income as dividends, the other 50% will be additions to retained earnings.
- What is Kenney's projected 2019 Net Income?
- What is the projected 2019 paid out Dividend?
- What is the forecasted addition to Retained Earnings to 2019?
