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Leveraged Buyouts: A Practical Introductory Guide to LBOs by David Pilger

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Chapter 8: Income Statement Forecast

Given our stated assumption that the percentage of revenue ratios for COGS, SG&A and depreciation and amortization for the explicit forecast range will be the same in years one through five as Year 0, we can now begin forecasting out our pro forma income statement.

Before we jump into our revenue projections, let’s first take care of an important number that we will come back to later on, depreciation and amortization. In order to arrive at our estimated depreciation and amortization for future periods we multiply the associated period’s projected revenue figure (F34) by our assumed depreciation and amortization-to-revenue ratio (E59), which in this example is 2%. Starting from cell (F54) the formula should ...

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