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INCOME STAEMENT Particulars Amount ($) Sales 200000 Cost of Goods Sold -95000 Gross Profit 105000 Utility -20000 Advertisement expense -1000 Administration expense -2000 Earning Before Interest and Tax (EBIT) 82000 Interest -10,000 Earning Before Tax (EBT) 72,000 Таx -5000 Earning After Tax (EAT) 67,000 Note :- The cost of raw material is already included in cost of goods sold. So, it has not been mentioned separetely in the income statement.

INCOME STAEMENT Particulars Amount ($) Sales 200000 Cost of Goods Sold -95000 Gross Profit 105000 Utility -20000 Advertisement expense -1000 Administration expense -2000 Earning Before Interest and Tax (EBIT) 82000 Interest -10,000 Earning Before Tax (EBT) 72,000 Таx -5000 Earning After Tax (EAT) 67,000 Note :- The cost of raw material is already included in cost of goods sold. So, it has not been mentioned separetely in the income statement.

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
b. Debt service ratio=operating income/debt service

INCOME STAEMENT Particulars Amount ($) Sales 200000 Cost of Goods Sold -95000 Gross Profit 105000 Utility -20000 Advertisement expense -1000 Administration expense -2000 Earning Before Interest and Tax (EBIT) 82000 Interest -10,000 Earning Before Tax (EBT) 72,000 Тах -5000 Earning After Tax (EAT) 67,000 Note :- The cost of raw material is already included in cost of goods sold. So, it has not been mentioned separetely in the income statement.
Transcribed Image Text:INCOME STAEMENT Particulars Amount ($) Sales 200000 Cost of Goods Sold -95000 Gross Profit 105000 Utility -20000 Advertisement expense -1000 Administration expense -2000 Earning Before Interest and Tax (EBIT) 82000 Interest -10,000 Earning Before Tax (EBT) 72,000 Тах -5000 Earning After Tax (EAT) 67,000 Note :- The cost of raw material is already included in cost of goods sold. So, it has not been mentioned separetely in the income statement.
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