ABC Ltd. is a manufacturing company that produces and sells electronic goods. The company's financial statements for the year ended December 31, 2022, show the following information: • Net sales revenue: $10,000,000 • Cost of goods sold: $6,000,000 • Selling and administrative expenses: $2,000,000 • Income tax expense: $500,000 • Interest expense: $100,000 Net income: $1,400,000 • Total assets: $15,000,000 • Total liabilities: $5,000,000 • Shareholders' equity: $10,000,000 • Number of shares outstanding: 1,000,000 • Dividend per share: $1.50 Questions: 1. What is the company's gross profit margin for the year ended December 31, 2022? 2. What is the company's operating profit margin for the year ended December 31, 2022? 3. What is the company's net profit margin for the year ended December 31, 2022?

ABC Ltd. is a manufacturing company that produces and sells electronic goods. The company's financial statements for the year ended December 31, 2022, show the following information: • Net sales revenue: $10,000,000 • Cost of goods sold: $6,000,000 • Selling and administrative expenses: $2,000,000 • Income tax expense: $500,000 • Interest expense: $100,000 Net income: $1,400,000 • Total assets: $15,000,000 • Total liabilities: $5,000,000 • Shareholders' equity: $10,000,000 • Number of shares outstanding: 1,000,000 • Dividend per share: $1.50 Questions: 1. What is the company's gross profit margin for the year ended December 31, 2022? 2. What is the company's operating profit margin for the year ended December 31, 2022? 3. What is the company's net profit margin for the year ended December 31, 2022?

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter5: The Income Statement And The Statement Of Cash Flows

Section: Chapter Questions

Problem 1RE: Brandt Corporation had sales revenue of 500,000 for the current year. For the year, its cost of...

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Brandt Corporation had sales revenue of 500,000 for the current year. For the year, its cost of goods sold was 240,000, its operating expenses were 50,000, its interest revenue was 2,000, and its interest expense was 12,000. Brandts income tax rate is 30%. Prepare Brandts multiple-step income statement for the current year.
Upton Computers makes bulk purchases of small computers, stocks them in conveniently located warehouses, ships them to its chain of retail stores, and has a staff to advise customers and help them set up their new computers. Uptons balance sheet as of December 31, 2019, is shown here (millions of dollars): Sales for 2019 were 350 million, and net income for the year was 10.5 million, so the firms profit margin was 3.0%. Upton paid dividends of 4.2 million to common stockholders, so its payout ratio was 40%. Its tax rate was 25%, and it operated at full capacity. Assume that all assets/sales ratios, (spontaneous liabilities)/sales ratios, the profit margin, and the payout ratio remain constant in 2020. a. If sales are projected to increase by 70 million, or 20%, during 2020, use the AFN equation to determine Uptons projected external capital requirements. b. Using the AFN equation, determine Uptons self-supporting growth rate. That is, what is the maximum growth rate the firm can achieve without having to employ nonspontaneous external funds? c. Use the forecasted financial statement method to forecast Uptons balance sheet for December 31, 2020. Assume that all additional external capital is raised as a line of credit at the end of the year. (Because the debt is added at the end of the year, there will be no additional interest expense due to the new debt.) Assume Uptons profit margin and dividend payout ratio will be the same in 2020 as they were in 2019. What is the amount of the line of credit reported on the 2020 forecasted balance sheets? (Hint: You dont need to forecast the income statements because the line of credit is taken out on the last day of the year and you are given the projected sales, profit margin, and dividend payout ratio; these figures allow you to calculate the 2020 addition to retained earnings for the balance sheet without actually constructing a full income statement.)
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