Chapter 18, Problem 3WE

a.

Summary Introduction

To calculate: The net income to total revenue ratio.

Introduction:

Autodesk Incorporation:

It is a global software and services company. This company offers AutoCAD, a professional designing software tool.

Net income:

Net income represents the valuation of the organizations, which is calculated by subtracting the expenses, interests, and taxes from the revenues from operations. The net income is used by the organization for computing earnings per share.

Revenue:

It is the income generated in the business during the normal course of business operations. It also includes the deductions and discounts for the returned goods. Revenue is the amount from which the costs are subtracted to obtain gross income of the business. Revenue is also commonly referred to as sales in the income statement.

b.

Summary Introduction

To calculate: The cost of revenue to total revenue ratio.

Introduction:

Autodesk Incorporation:

It is a global software and services company. This company offers AutoCAD, a professional designing software tool.

Cost of revenue:

The cost of revenue is the total cost of production and distribution of the goods or services to the customers. It is further segregated into direct and indirect costs.

Revenue:

It is the income generated in the business during the normal course of business operations. It also includes the deductions and discounts for the returned goods. Revenue is the amount from which the costs are subtracted to obtain gross income of the business. Revenue is also commonly referred to as sales in the income statement.

c.

Summary Introduction

To calculate: The selling, general, and administrative expenses to the total revenue ratio.

Introduction:

Autodesk Incorporation:

It is a global software and services company. This company offers AutoCAD, a professional designing software tool.

Selling, general, and administrative (SGA) expense:

The expenses incurred by a company for selling or distributing such as carriage outward or freight for carrying the goods from place of production to the place of consumption. It also includes costs of general nature such as electricity as well as administrative nature such as salaries and wages.

Revenue:

It is the income generated in the business during the normal course of business operations. It also includes the deductions and discounts for the returned goods. Revenue is the amount from which the costs are subtracted to obtain gross income of the business. Revenue is also commonly referred to as sales in the income statement.

d.

Summary Introduction

To calculate: The income tax expense to the total revenue ratio.

Introduction:

Autodesk Incorporation:

It is a global software and services company. This company offers AutoCAD, a professional designing software tool.

Income tax expense:

Income tax is the amount of tax imposed by the government on the business firms. Every business organization is subject to income tax, if there are no exemptions available in tax laws, depending on the tax slab it falls in.

Revenue:

It is the income generated in the business during the normal course of business operations. It also includes the deductions and discounts for the returned goods. Revenue is the amount from which the costs are subtracted to obtain gross income of the business. Revenue is also commonly referred to as sales in the income statement.