Profit Margin & Income Calculation
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ABC Company Income Statement for 1998
1. Sales.........................................................3,000,000
2. Cost of Goods Sold....................................2,100,000
3. Gross Profits..............................................900,000
4. Selling and admin expense......................450,000
5. Depreciation expense................................
6. Operating profit (EBIT)...............................450,000
7. Interest expense...........................................75,000
8. Earnings before taxes (EBT).................................375,000
9. Taxes.........30%.........................................................112,500
10. Earnings after taxes (EAT)........................................262,500
What is the method for computing the profit margin for 1998?
If sales in 1999 increase by 10% and cost of goods sol increases by 25%, would this company be able to keep all expenses the same? How would I find the profit margin and income for the next year?
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Solution Summary
The solution computes profit margin & income with the given information.
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