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A В 1 Income statement for LMN company For 31 December 2003 4 Particulars Amount 5 Sales $ 200,000.00 6 Cost of goods sold (COGS) $ 95,000.00 7 Gross Profit 8 Utility 105,000.00 20,000.00 9 Administration expenses 2,000.00 10 Advertisement expenses 1,000.00 11 EBIT $ 82,000.00 12 Interest expenses $ 10,000.00 13 ЕВT 72,000.00 14 Tax $ 5,000.00 %24 %24 %24 %24 %24 %24 %24 2.

A В 1 Income statement for LMN company For 31 December 2003 4 Particulars Amount 5 Sales $ 200,000.00 6 Cost of goods sold (COGS) $ 95,000.00 7 Gross Profit 8 Utility 105,000.00 20,000.00 9 Administration expenses 2,000.00 10 Advertisement expenses 1,000.00 11 EBIT $ 82,000.00 12 Interest expenses $ 10,000.00 13 ЕВT 72,000.00 14 Tax $ 5,000.00 %24 %24 %24 %24 %24 %24 %24 2.

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Based on the income statement given calculate and explain the :
profitability ratio
a. Gross profit ratio = gross profit/net sales
b. Operating margin ratio =operating income/net sales
c. Asset Turnover ratio = net sales / total assets
d. Return on equity ratio = net sales/ shareholders equity

Leverage ratio
a. interest coverage ratio =operating income / interest expenses

A В 1 Income statement for LMN company For 31 December 2003 3 4 Particulars Amount 5 Sales $ 200,000.00 6 Cost of goods sold (COGS) $ 95,000.00 7 Gross Profit 105,000.00 8 Utility $ 20,000.00 9 Administration expenses 2,000.00 10 Advertisement expenses 1,000.00 11 EBIT $ 82,000.00 12 Interest expenses $ 10,000.00 13 ЕВT $ 72,000.00 14 Tax $ 5,000.00 15 Net Profit 67,000.00 16 %24 %24 %24 %24 %24 %24 %24 2.
Transcribed Image Text:A В 1 Income statement for LMN company For 31 December 2003 3 4 Particulars Amount 5 Sales $ 200,000.00 6 Cost of goods sold (COGS) $ 95,000.00 7 Gross Profit 105,000.00 8 Utility $ 20,000.00 9 Administration expenses 2,000.00 10 Advertisement expenses 1,000.00 11 EBIT $ 82,000.00 12 Interest expenses $ 10,000.00 13 ЕВT $ 72,000.00 14 Tax $ 5,000.00 15 Net Profit 67,000.00 16 %24 %24 %24 %24 %24 %24 %24 2.
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