Dr. Gupta Diagnostics' income statement for 20XX is as follows: Sales $2,380,000 Cost of goods sold...

Transcribed Image Text:

Dr. Gupta Diagnostics' income statement for 20XX is as follows: Sales $2,380,000 Cost of goods sold 1,450,000 Gross profit 930,000 Selling and administrative expense 331,000 Operating profit 599,000 Interest expense 59,900 Income before taxes 539,100 Taxes (30%) 161,730 Income after taxes $377,370 a. Compute the profit margin in 20XX. (Round the final answer to 2 decimal places.) Profit margin % b. Assume in 20XY 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. Once again, assume a tax rate of 30 percent. What are the income after taxes and profit margin in 20XY? (Round the profit margin to 2 decimal places.) Income after taxes Profit margin 20XY $ % Dr. Gupta Diagnostics' income statement for 20XX is as follows: Sales $2,380,000 Cost of goods sold 1,450,000 Gross profit 930,000 Selling and administrative expense 331,000 Operating profit 599,000 Interest expense 59,900 Income before taxes 539,100 Taxes (30%) 161,730 Income after taxes $377,370 a. Compute the profit margin in 20XX. (Round the final answer to 2 decimal places.) Profit margin % b. Assume in 20XY 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. Once again, assume a tax rate of 30 percent. What are the income after taxes and profit margin in 20XY? (Round the profit margin to 2 decimal places.) Income after taxes Profit margin 20XY $ %

Answer rating: 100% (QA)

a Profit Margin in 20XX To calculate the profit margin use this formula Profit Margin Net Income Sal... View the full answer