Respuesta :
Answer:
Depreciation and Amortization charge of Pearson Brothers is $2.5 M.
Please note that all figures are reported dollars in Millions, where M denotes Millions
Explanation:
EBITDA – Depreciation & Amortization = EBIT
EBIT – Interest Expense = EBT
EBT – Tax Expense = Net Income
Now, Inputting values in the equations:
EBT – Tax Expense = Net Income
EBT – (40% of EBT) = Net Income
EBT – 40% EBT = $1.8 M
60% EBT = $1.8 M
EBT = $1.8 M ÷ 60%
EBT = $3.0 M
EBIT – Interest Expense = EBT
EBIT – $2.0 M = $3.0 M
EBIT = $3.0 M + $2.0 M
EBIT = $5.0
EBITDA – Depreciation & Amortization = EBIT
$7.5 M – Depreciation & Amortization = $5.0
$7.5 M – $5.0 = Depreciation & Amortization
Depreciation & Amortization = $2. 5 M
Solution in Statement form is also presented below (calculations based on reverse working)
EBITDA $7.5 M
Depreciation & Amortization $2.5 M
EBIT $5.0 M
Interest Expenses $2.0 M
EBT $3.0 M
Tax (40%) $1.2 M
Net Income $1.8 M
