**Estimating EPS**

**EPS**

_{1 }= [sales (EBITDA %) â€“ int - dep^{n}] (1 - t)Where sales, interest & depreciation are all per share amounts.

**Question:**

Analyst gathered the following financial information about a firm:

- Estimated sales per share Â Â Â Â Â Â Â Â Â Â Â Â $200

Â - An EBITDA profit margin estimate Â Â Â Â Â Â Â Â Â Â 20%

Â - Estimated depreciation per share Â Â Â Â Â Â Â Â Â Â Â $15

Â - Interest per share Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â $5

**Ans:**

Expected EPS = [(sales)*(EBITDA%) â€“ dep

^{n}- interest](1-t)

= [(200)(0.20) â€“ 15 - 5] (1-0.3)

= $14

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