Where did the -25,000 and +6,000 come from? thank you! Your company has sales of $425,000; cost of goods sold = $200,000. The company paid interest of $25,000 on a loan and received $20,000 in dividends from GE. They paid $55,750 in common stock dividends and $10,000 in preferred stock dividends. What was their Federal tax bill (use 21% flat tax)? First find the taxable income: $425,000 -200,000 225,000 - 25,000 200,000 + 6,000 $206,000 x .21 = $43,260 = Fed Tax Bill
Financial Ratios
A Ratio refers to a figure calculated as a reference to the relationship of two or more numbers and can be expressed as a fraction, proportion, percentage, or the number of times. When the number is determined by taking two accounting numbers derived from the financial statements, it is termed as the accounting ratio.
Return on Equity
The Return on Equity (RoE) is a measure of the profitability of a business concerning the funds by its stockholders/shareholders. ROE is a metric used generally to determine how well the company utilizes its funds provided by the equity shareholders.
Please see problem below. Where did the -25,000 and +6,000 come from? thank you!
Your company has sales of $425,000; cost of goods sold = $200,000. The company paid interest
of $25,000 on a loan and received $20,000 in dividends from GE. They paid $55,750 in common
stock dividends and $10,000 in
21% flat tax)?
First find the taxable income:
$425,000
-200,000
225,000
- 25,000
200,000
+ 6,000
$206,000 x .21 = $43,260 = Fed Tax Bill
sales = $425,000
cost of goods sold = $200,000
interest expenses = $25,000
Dividend received = $20,000
Tax rate = 21%
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