Sample Solution

Fenty Beauty is a cosmetics company dedicated to creating products that are high-quality and inclusive. This pro forma income statement will provide an estimate of the company’s annual financial performance for the next year.

Revenues: Fenty Beauty expects to generate revenue totaling $1,000,000 in the upcoming year through sales of its beauty products. With a focus on digital marketing campaigns, online sales are anticipated to be approximately 75% of total revenue with 25% coming from traditional retail stores.

Cost of Goods Sold (COGS): All COGS associated with direct production costs such as labor, materials and overhead related expenses are expected to total $500,000 over the course of the next year based on projected volume levels.

Gross Profit: After taking into account COGS, Fenty Beauty anticipates achieving a gross profit margin of 50%, resulting in a gross profit amounting to $500,000 for the upcoming year.

Operating Expenses: Operating expenses for Fenty Beauty such advertising expenditures and general administrative costs are estimated at $200,000 each month or $2 million over 12 months period.

Net Income Before Taxes: As we subtract operating expenses from our gross profit figure we can estimate net income before taxes at $300,000 for this fiscal year period.

Net Income After Tax (NIAT): Subtracting out all corporate taxes gives us our final NIAT result; an estimated net income after tax amounting to either 210 000 or 240 000 dollars depending on actual tax rates paid during the time period mentioned above .