In this workout, Trysil has acquired Hemsedal for 1,500 The acquisition is 100% financed with equity Expected SG&A synergies are 100 each year and applicable tax rate is 30% We're asked using the information below to provide the proforma financials for the combo i.e. come up with the combo income statement So the first thing I do is come up with my combo column and I want to sum to the left So I take my sales of the acquirer plus the target, plus any adjustments Same for EBITDA, same for EBIT and I'll do the same for net income Now we need to come up with our adjustments, well looking at our adjustments we've got an acquisition price and we've got equity financing That means there's going to be no new debt and thus no new interest However the SG&A synergies and tax on synergies do need to be taken into account So SG&A synergies will affect EBITDA They'll also affect EBIT But our net income won't necessarily go up by 100. It will go up by 100 less the tax on that extra profit So I'm going to take the 100 but I now need to make it post tax. I'll times it one minus 30% My net income has thus gone up by 70, you take the 130 of Trysil plus the 50 of Hemsedal plus only the 70 being post tax synergies