Homework SourseIncome statement information for Sadie Company is below Sale
Income statement information for Sadie Company is below:
Sales
$185,000
Cost of goods sold
115,000
Gross profit
$ 70,000
Selling Expenses
25,000
Administrative Expense
10,000
Total Expenses
$35,000
Income from operations
35,000
Income Tax Expense
10,000
Net Income
$25,000
Using vertical analysis of the income statement for Sadie Company, determine the gross profit margin. Round to the nearest whole number.
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| Income statement information for Sadie Company is below: | |
| Sales | $185,000 |
| Cost of goods sold | 115,000 |
| Gross profit | $ 70,000 |
| Selling Expenses | 25,000 |
| Administrative Expense | 10,000 |
| Total Expenses | $35,000 |
| Income from operations | 35,000 |
| Income Tax Expense | 10,000 |
| Net Income | $25,000 |
| Using vertical analysis of the income statement for Sadie Company, determine the gross profit margin. Round to the nearest whole number. |
Solution
gross profit margin for the company = 1 - 115/185
gross profit margin for the company = 38 %
