Income statement for KTA LTD for the 3 years

	2020, $	2021, $	2022, $
Revenue (5000 unit, price $3 per unit)	15000
Cost of goods sold ($1 per unit)	5000
Gross profit	10000
Overhead expenses	4000
Operating profit (profit before taxes)	6000
Finance cost (interest)	2000
Profit before tax	4000
Income tax (18%)	720
Profit for the year (net profit after tax)	3280
Dividends paid	1280
Retained profit	2000

30-min task

2021 Year.

- Each unit was sold for $4,

- The cost of each unit rose to $1.6,

- Overhead expenses rose by 25%;

- Interest costs were reduced by 50%;

- Income tax rate rose to 25%

Assume dividends remain unchanged.

2022 Year (prognosis)

The number of units sold has increased by 20%, but the selling price remain unchanged;

The cost of goods sold per unit has fallen to $0.90;

Transport costs (included in overheads) have increased by $500.

Calculate the new level of retained profit assuming no other change.

Calculate for 2020, 2021 and 2022 year:

–Gross profit margin; - Net profit margin; - ROA (returned on assets)

if Assets = $40000 (2021 year), Assets = $45000 (2021 year), Assets = $38000 (2021 year).

Indicators for 2020 year

GPM = Gross profit / Revenue = 10000 / 15000 = 0.67 = 67%

NPM = Net profit / Revenue = 3200/ 15000 = 0.21 = 21%

ROA = 3200/40000 = 0.08 = 8%

Answer rating: 100% (QA)

Indicators for 2021 year Revenue 5000 units 4 per unit 20000 Cost of goods sold 5000 units 16 per un... View the full answer