Listed below is the 2021 income statement for Tom and Sue Travels, Inc. ...
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Listed below is the 2021 income statement for Tom and Sue Travels, Inc.
TOM AND SUE TRAVELS, INC.
Income Statement for Year Ending December 31, 2021
(in millions of dollars)
Net sales
$
16.600
Less: Cost of goods sold
7.500
Gross profits
$
9.100
Less: Other operating expenses
3.400
Earnings before interest, taxes, depreciation, and amortization (EBITDA)
$
5.700
Less: Depreciation
2.300
Earnings before interest and taxes (EBIT)
$
3.400
Less: Interest
0.765
Earnings before taxes (EBT)
$
2.635
Less: Taxes
0.553
Net income
$
2.082
The CEO of Tom and Sues wants the company to earn a net income of $2.450 million in 2022. 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 $1.231 million, and the firms tax rate will be 21 percent.
Calculate the net sales needed to produce net income of $2.450 million. (Enter your answer in millions of dollars rounded to 3 decimal places.)
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