Dr. Zhivago Diagnostics Corporation's income statement for 20X1 is as follows: Sales Cost of goods sold Gross profit Selling and administrative expense Operating profit Interest expense Income before taxes Taxes (30%) Income after taxes a. Compute the profit margin for 20X1. $ 2,550,000 1,740,000 $810,000 357,000 $ 453,000 59,900 $ 393,100 117,930 $ 275,170 Note: Input the profit margin as a percent rounded to 2 decimal places. Profit margin 10.79% b. Assume that in 20X2, sales increase by 10 percent and cost of goods sold increases by 20 percent. The firm is able to keep all other expenses the same. Assume a tax rate of 30 percent on income before taxes. What is income after taxes and the profit margin for 20X2? Note: Input the profit margin as a percent rounded to 2 decimal places. Income after taxes Profit margin 20X2 %
Dr. Zhivago Diagnostics Corporation's income statement for 20X1 is as follows: Sales Cost of goods sold Gross profit Selling and administrative expense Operating profit Interest expense Income before taxes Taxes (30%) Income after taxes a. Compute the profit margin for 20X1. $ 2,550,000 1,740,000 $810,000 357,000 $ 453,000 59,900 $ 393,100 117,930 $ 275,170 Note: Input the profit margin as a percent rounded to 2 decimal places. Profit margin 10.79% b. Assume that in 20X2, sales increase by 10 percent and cost of goods sold increases by 20 percent. The firm is able to keep all other expenses the same. Assume a tax rate of 30 percent on income before taxes. What is income after taxes and the profit margin for 20X2? Note: Input the profit margin as a percent rounded to 2 decimal places. Income after taxes Profit margin 20X2 %
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter12: Fainancial Statement Analysis
Section: Chapter Questions
Problem 87PSB
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