Scenario 1 The financial statements and data shown below are to be used for the next three (3) questions. All figures are in millions except the tax rate and the year-end stock price. BALANCE SHEET Cash $ 140.0 Accounts payable $ 800.0 Accts. receivable 880.0 Notes payable 600.0 Inventories 1,320.0 Accruals 400.0 Total current assets $2,340.0 Total current liabilities $1,800.0 Long-term bonds 1,000.0 Total debt $2,800.0 Common stock 200.0 Retained earnings 1,000.0 Net plant & equip. 1,660.0 Total common equity $1,200.0 Total assets $4,000.0 Total liabilities & equity $4,000.0 INCOME STATEMENT Net sales $6,000.0 Operating costs 5,599.8 Depreciation 100.2 EBIT $ 300.0 Less: Interest 96.0 EBT $ 204.0 Less: Taxes 81.6 Net income $ 122.4 OTHER DATA Shares outstanding 60.00 Common dividends $42.8 Federal plus state income tax rate 40% Year-end stock price $30.60 Use Scenario 1 to answer the question. What is the firm's net profit margin?

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter1: The Role Of Accounting In Business

Section: Chapter Questions

Problem 1.1.2P: Income statement, retained earnings statement, and balance sheet The amounts of the assets and...

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Scenario 1
The financial statements and data shown below are to be used for the next three (3) questions. All figures are in millions except the tax rate and the year-end stock price.

BALANCE SHEET
Cash	$ 140.0	Accounts payable	$ 800.0
Accts. receivable	880.0	Notes payable	600.0
Inventories	1,320.0	Accruals	400.0
Total current assets	$2,340.0	Total current liabilities	$1,800.0
		Long-term bonds	1,000.0
		Total debt	$2,800.0
		Common stock	200.0
		Retained earnings	1,000.0
Net plant & equip.	1,660.0	Total common equity	$1,200.0
Total assets	$4,000.0	Total liabilities & equity	$4,000.0

INCOME STATEMENT
Net sales	$6,000.0
Operating costs	5,599.8
Depreciation	100.2
EBIT	$ 300.0
Less: Interest	96.0
EBT	$ 204.0
Less: Taxes	81.6
Net income	$ 122.4
OTHER DATA
Shares outstanding	60.00
Common dividends	$42.8
Federal plus state income tax rate	40%
Year-end stock price	$30.60

Use Scenario 1 to answer the question. What is the firm's net profit margin?

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