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Pro Forma Income Statements. Presented below is the consolidated statement of earnings for Mann & Miller, Inc. Using the Mann & Miller In. (M&M) consolidated statement of earnings as your base year, prepare pro forma income statements for M&M for 2013 & 2014 using an EXCEL, spreadsheet. Relevant assumptions that you should use include: Sales growth is twelve percent per year. Gross profit margin is 70 percent. Effective income tax rate is 29 percent. All expenses except interest expense, vary as a function of sales. Interest expense is eight percent of the beginning balance of long-term debt.

E12.20	Consolidated Statement of Earnings				Proforma Statement of Earnings
	2010	2011	2012		2013	2014
Sales to customers	29,172	32,317	36,298
Cost of Goods Sold	8,957	9,581	10,447
Gross Profit	20,215	22,736	25,851
SG&A Expenses	10,495	11,260	12,216
Research Exp	3,105	3,591	3,957
Purchased IN-Process R&D	66	105	189
Interest income	(429)	(456)	(256)
Interest Expense	204	153	160
Other (income)expense, net	(94)	185	294
TOTAL Expenses	13,347	14,838	16,560
Earnings b/4 taxes	6,868	7,898	9,291
Income Taxes	1,915	2,230	2,694
Net Earnings	4,953	5,668	6,597
Basic net earnings per share	1.65	1.87	2.20
Diluted net earnings per share	1.61	1.84	2.16

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