Annual Report is a comprehensive financial report that shows all the business activities that takes place throughout the previous financial year. Its purpose is to provide the complete financial information of a company’s financial activities to its users in order to help them analyze and take well informed decisions. The following are the values for Incorporation A and Incorporation W. Profit margin measures the amount of net income earned from each dollar of sales revenue generated by a company. Thus, it shows the relationship between the net income and net sales. It is calculated by using the following formula: Profit Margin = Net income Net sales × 100 To Calculate: The profit margin for the year 2014 of Incorporation A and Incorporation W.

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Answer 1

Question

Chapter 5, Problem 5.3EYCT

(a) (1)

To determine

Annual Report is a comprehensive financial report that shows all the business activities that takes place throughout the previous financial year. Its purpose is to provide the complete financial information of a company’s financial activities to its users in order to help them analyze and take well informed decisions.

The following are the values for Incorporation A and Incorporation W.

Profit margin measures the amount of net income earned from each dollar of sales revenue generated by a company. Thus, it shows the relationship between the net income and net sales. It is calculated by using the following formula:

Profit Margin=Net incomeNet sales×100

To Calculate: The profit margin for the year 2014 of Incorporation A and Incorporation W.

(2)

To determine

Gross profit represents the revenue after the deduction of cost of goods sold from the net sales of a business. Its mathematical representation is as below:

Gross profit=Net sales–Cost of goods sold

To Calculate: The gross profit for the year 2014 of Incorporation A and Incorporation

W.

(3)

To determine

Gross profit rate is the financial ratio shows the relationship between the gross profit on sales and net sales. Gross profit is the difference between the total revenue and the cost of goods sold. It is calculated by using the following formula:

Gross profit rate=Gross profitNet sales×100

To Calculate: The gross profit rate for the year 2014 of Incorporation A and Incorporation W.

(4)

To determine

Operating income is the difference between the gross profit (revenue minus cost of goods sold) and operating expenses incurred during a particular year.

To Determine: The operating income for 2014 of Incorporation A and Incorporation W.

(5)

To determine

Operating income is the difference between the gross profit (revenue minus cost of goods sold) and operating expenses incurred during a particular year.

To Compute: The percentage change in operating income from 2014 to 2013 for Incorporation A and Incorporation W.

(b)

To determine

To Conclude: The relative profitability of the two companies from the above data.

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Answer 2

Question

Chapter 5, Problem 5.3EYCT

(a) (1)

To determine

Annual Report is a comprehensive financial report that shows all the business activities that takes place throughout the previous financial year. Its purpose is to provide the complete financial information of a company’s financial activities to its users in order to help them analyze and take well informed decisions.

The following are the values for Incorporation A and Incorporation W.

Profit margin measures the amount of net income earned from each dollar of sales revenue generated by a company. Thus, it shows the relationship between the net income and net sales. It is calculated by using the following formula:

Profit Margin=Net incomeNet sales×100

To Calculate: The profit margin for the year 2014 of Incorporation A and Incorporation W.

(2)

To determine

Gross profit represents the revenue after the deduction of cost of goods sold from the net sales of a business. Its mathematical representation is as below:

Gross profit=Net sales–Cost of goods sold

To Calculate: The gross profit for the year 2014 of Incorporation A and Incorporation

W.

(3)

To determine

Gross profit rate is the financial ratio shows the relationship between the gross profit on sales and net sales. Gross profit is the difference between the total revenue and the cost of goods sold. It is calculated by using the following formula:

Gross profit rate=Gross profitNet sales×100

To Calculate: The gross profit rate for the year 2014 of Incorporation A and Incorporation W.

(4)

To determine

Operating income is the difference between the gross profit (revenue minus cost of goods sold) and operating expenses incurred during a particular year.

To Determine: The operating income for 2014 of Incorporation A and Incorporation W.

(5)

To determine

Operating income is the difference between the gross profit (revenue minus cost of goods sold) and operating expenses incurred during a particular year.

To Compute: The percentage change in operating income from 2014 to 2013 for Incorporation A and Incorporation W.

(b)

To determine

To Conclude: The relative profitability of the two companies from the above data.

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Answer 3

Question

Chapter 5, Problem 5.3EYCT

(a) (1)

To determine

Annual Report is a comprehensive financial report that shows all the business activities that takes place throughout the previous financial year. Its purpose is to provide the complete financial information of a company’s financial activities to its users in order to help them analyze and take well informed decisions.

The following are the values for Incorporation A and Incorporation W.

Profit margin measures the amount of net income earned from each dollar of sales revenue generated by a company. Thus, it shows the relationship between the net income and net sales. It is calculated by using the following formula:

Profit Margin=Net incomeNet sales×100

To Calculate: The profit margin for the year 2014 of Incorporation A and Incorporation W.

(2)

To determine

Gross profit represents the revenue after the deduction of cost of goods sold from the net sales of a business. Its mathematical representation is as below:

Gross profit=Net sales–Cost of goods sold

To Calculate: The gross profit for the year 2014 of Incorporation A and Incorporation

W.

(3)

To determine

Gross profit rate is the financial ratio shows the relationship between the gross profit on sales and net sales. Gross profit is the difference between the total revenue and the cost of goods sold. It is calculated by using the following formula:

Gross profit rate=Gross profitNet sales×100

To Calculate: The gross profit rate for the year 2014 of Incorporation A and Incorporation W.

(4)

To determine

Operating income is the difference between the gross profit (revenue minus cost of goods sold) and operating expenses incurred during a particular year.

To Determine: The operating income for 2014 of Incorporation A and Incorporation W.

(5)

To determine

Operating income is the difference between the gross profit (revenue minus cost of goods sold) and operating expenses incurred during a particular year.

To Compute: The percentage change in operating income from 2014 to 2013 for Incorporation A and Incorporation W.

(b)

To determine

To Conclude: The relative profitability of the two companies from the above data.

Expert Solution & Answer

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Answer 4

Question

Chapter 5, Problem 5.3EYCT

(a) (1)

To determine

Annual Report is a comprehensive financial report that shows all the business activities that takes place throughout the previous financial year. Its purpose is to provide the complete financial information of a company’s financial activities to its users in order to help them analyze and take well informed decisions.

The following are the values for Incorporation A and Incorporation W.

Profit margin measures the amount of net income earned from each dollar of sales revenue generated by a company. Thus, it shows the relationship between the net income and net sales. It is calculated by using the following formula:

Profit Margin=Net incomeNet sales×100

To Calculate: The profit margin for the year 2014 of Incorporation A and Incorporation W.

(2)

To determine

Gross profit represents the revenue after the deduction of cost of goods sold from the net sales of a business. Its mathematical representation is as below:

Gross profit=Net sales–Cost of goods sold

To Calculate: The gross profit for the year 2014 of Incorporation A and Incorporation

W.

(3)

To determine

Gross profit rate is the financial ratio shows the relationship between the gross profit on sales and net sales. Gross profit is the difference between the total revenue and the cost of goods sold. It is calculated by using the following formula:

Gross profit rate=Gross profitNet sales×100

To Calculate: The gross profit rate for the year 2014 of Incorporation A and Incorporation W.

(4)

To determine

Operating income is the difference between the gross profit (revenue minus cost of goods sold) and operating expenses incurred during a particular year.

To Determine: The operating income for 2014 of Incorporation A and Incorporation W.

(5)

To determine

Operating income is the difference between the gross profit (revenue minus cost of goods sold) and operating expenses incurred during a particular year.

To Compute: The percentage change in operating income from 2014 to 2013 for Incorporation A and Incorporation W.

(b)

To determine

To Conclude: The relative profitability of the two companies from the above data.

Expert Solution & Answer

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See solution

Answer 5

Chapter 5, Problem 5.3EYCT

(a) (1)

To determine

Annual Report is a comprehensive financial report that shows all the business activities that takes place throughout the previous financial year. Its purpose is to provide the complete financial information of a company’s financial activities to its users in order to help them analyze and take well informed decisions.

The following are the values for Incorporation A and Incorporation W.

Profit margin measures the amount of net income earned from each dollar of sales revenue generated by a company. Thus, it shows the relationship between the net income and net sales. It is calculated by using the following formula:

Profit Margin=Net incomeNet sales×100

To Calculate: The profit margin for the year 2014 of Incorporation A and Incorporation W.

(2)

To determine

Gross profit represents the revenue after the deduction of cost of goods sold from the net sales of a business. Its mathematical representation is as below:

Gross profit=Net sales–Cost of goods sold

To Calculate: The gross profit for the year 2014 of Incorporation A and Incorporation

W.

(3)

To determine

Gross profit rate is the financial ratio shows the relationship between the gross profit on sales and net sales. Gross profit is the difference between the total revenue and the cost of goods sold. It is calculated by using the following formula:

Gross profit rate=Gross profitNet sales×100

To Calculate: The gross profit rate for the year 2014 of Incorporation A and Incorporation W.

(4)

To determine

Operating income is the difference between the gross profit (revenue minus cost of goods sold) and operating expenses incurred during a particular year.

To Determine: The operating income for 2014 of Incorporation A and Incorporation W.

(5)

To determine

Operating income is the difference between the gross profit (revenue minus cost of goods sold) and operating expenses incurred during a particular year.

To Compute: The percentage change in operating income from 2014 to 2013 for Incorporation A and Incorporation W.

(b)

To determine

To Conclude: The relative profitability of the two companies from the above data.

Answer 6

Chapter 5, Problem 5.3EYCT

(a) (1)

To determine

Annual Report is a comprehensive financial report that shows all the business activities that takes place throughout the previous financial year. Its purpose is to provide the complete financial information of a company’s financial activities to its users in order to help them analyze and take well informed decisions.

The following are the values for Incorporation A and Incorporation W.

Profit margin measures the amount of net income earned from each dollar of sales revenue generated by a company. Thus, it shows the relationship between the net income and net sales. It is calculated by using the following formula:

Profit Margin=Net incomeNet sales×100

To Calculate: The profit margin for the year 2014 of Incorporation A and Incorporation W.

Answer 7

Chapter 5, Problem 5.3EYCT

(a) (1)

To determine

Annual Report is a comprehensive financial report that shows all the business activities that takes place throughout the previous financial year. Its purpose is to provide the complete financial information of a company’s financial activities to its users in order to help them analyze and take well informed decisions.

The following are the values for Incorporation A and Incorporation W.

Profit margin measures the amount of net income earned from each dollar of sales revenue generated by a company. Thus, it shows the relationship between the net income and net sales. It is calculated by using the following formula:

Profit Margin=Net incomeNet sales×100

To Calculate: The profit margin for the year 2014 of Incorporation A and Incorporation W.

Answer 8

(2)

To determine

Gross profit represents the revenue after the deduction of cost of goods sold from the net sales of a business. Its mathematical representation is as below:

Gross profit=Net sales–Cost of goods sold

To Calculate: The gross profit for the year 2014 of Incorporation A and Incorporation

W.

Answer 9

(2)

To determine

Gross profit represents the revenue after the deduction of cost of goods sold from the net sales of a business. Its mathematical representation is as below:

Gross profit=Net sales–Cost of goods sold

To Calculate: The gross profit for the year 2014 of Incorporation A and Incorporation

W.

Answer 10

(3)

To determine

Gross profit rate is the financial ratio shows the relationship between the gross profit on sales and net sales. Gross profit is the difference between the total revenue and the cost of goods sold. It is calculated by using the following formula:

Gross profit rate=Gross profitNet sales×100

To Calculate: The gross profit rate for the year 2014 of Incorporation A and Incorporation W.

Answer 11

(3)

To determine

Gross profit rate is the financial ratio shows the relationship between the gross profit on sales and net sales. Gross profit is the difference between the total revenue and the cost of goods sold. It is calculated by using the following formula:

Gross profit rate=Gross profitNet sales×100

To Calculate: The gross profit rate for the year 2014 of Incorporation A and Incorporation W.

Answer 12

(4)

To determine

Operating income is the difference between the gross profit (revenue minus cost of goods sold) and operating expenses incurred during a particular year.

To Determine: The operating income for 2014 of Incorporation A and Incorporation W.

Answer 13

(4)

To determine

Operating income is the difference between the gross profit (revenue minus cost of goods sold) and operating expenses incurred during a particular year.

To Determine: The operating income for 2014 of Incorporation A and Incorporation W.

Answer 14

(5)

To determine

Operating income is the difference between the gross profit (revenue minus cost of goods sold) and operating expenses incurred during a particular year.

To Compute: The percentage change in operating income from 2014 to 2013 for Incorporation A and Incorporation W.

Answer 15

(5)

To determine

Operating income is the difference between the gross profit (revenue minus cost of goods sold) and operating expenses incurred during a particular year.

To Compute: The percentage change in operating income from 2014 to 2013 for Incorporation A and Incorporation W.

Answer 16

(b)

To determine

To Conclude: The relative profitability of the two companies from the above data.

Answer 17

(b)

To determine

To Conclude: The relative profitability of the two companies from the above data.

Answer 18

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Answer 19

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Answer 20

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Answer 21

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Solution Summary: The author explains how to calculate the profit margin of Incorporation A and incorporation W.

Gross profit represents the revenue after the deduction of cost of goods sold from the net sales of a business. Its mathematical representation is as below:

Gross profit=Net sales–Cost of goods sold

To Calculate: The gross profit for the year 2014 of Incorporation A and Incorporation

W.

Operating income is the difference between the gross profit (revenue minus cost of goods sold) and operating expenses incurred during a particular year.

To Determine: The operating income for 2014 of Incorporation A and Incorporation W.

Operating income is the difference between the gross profit (revenue minus cost of goods sold) and operating expenses incurred during a particular year.

To Compute: The percentage change in operating income from 2014 to 2013 for Incorporation A and Incorporation W.

To Conclude: The relative profitability of the two companies from the above data.

Want to see the full answer?

Chapter 5 Solutions

Solution Summary: The author explains how to calculate the profit margin of Incorporation A and incorporation W.

Gross profit represents the revenue after the deduction of cost of goods sold from the net sales of a business. Its mathematical representation is as below: Gross profit=Net sales–Cost of goods sold To Calculate: The gross profit for the year 2014 of Incorporation A and Incorporation W.

Operating income is the difference between the gross profit (revenue minus cost of goods sold) and operating expenses incurred during a particular year. To Determine: The operating income for 2014 of Incorporation A and Incorporation W.

Operating income is the difference between the gross profit (revenue minus cost of goods sold) and operating expenses incurred during a particular year. To Compute: The percentage change in operating income from 2014 to 2013 for Incorporation A and Incorporation W.

To Conclude: The relative profitability of the two companies from the above data.

Want to see the full answer?

Chapter 5 Solutions

Gross profit represents the revenue after the deduction of cost of goods sold from the net sales of a business. Its mathematical representation is as below:

Gross profit=Net sales–Cost of goods sold

To Calculate: The gross profit for the year 2014 of Incorporation A and Incorporation

W.

Operating income is the difference between the gross profit (revenue minus cost of goods sold) and operating expenses incurred during a particular year.

To Determine: The operating income for 2014 of Incorporation A and Incorporation W.

Operating income is the difference between the gross profit (revenue minus cost of goods sold) and operating expenses incurred during a particular year.

To Compute: The percentage change in operating income from 2014 to 2013 for Incorporation A and Incorporation W.