DRUM INC.
Income Statement
For Year Ended Dec 31, 2020
Sales		$445,000
Cost of Goods Sold		168,000
Gross Margin		$277,000
Operating Expenses		96,000
Depreciation Expense		29,000
Operating Income		$152,000
Interest Expense		(2,000)
Gain on Sale of Equipment		5,000
Loss on Sale of Long-Term Investments		(4,000)
Income before Taxes		$151,000
Income Tax Expense		48,000
Net Income		$103,000
DRUM Inc.
Comparative Balance Sheets
Dec 31, 2020 & 2019
	2020	2019
Assets
Current Assets:
Cash	$85,000	$34,000
Accounts Receivable	25,000	28,000
Merchandise Inventory	83,000	65,000
Prepaid Expenses	1,000	5,000
Long-Term Assets:
Equipment	245,000	221,000
Accumulated Depr-Equipment	(70,000)	(61,000)
Long-Term Investments	18,000	31,000
Total Assets	$387,000	$323,000
Liabilities & Equity
Current Liabilities:
Accounts Payable	$20,000	$30,000
Income Tax Payable	7,000	6,000
Long-Term Liabilities:
Notes Payable	4,000	20,000
Equity:
Common Stock	225,000	217,000
Retained Earnings	131,000	50,000
Total Liabilities & Equity	$387,000	$323,000
Additional Information:
1. Sold equipment with a cost of $23,000, yielding
a $5,000 gain.
2. Purchased equipment for $47,000 cash.
3. Sold long-term investments for $9,000 cash,
which had an original cost of $13,000.
4. Paid $16,000 cash for the principal amount
on Notes Payable.
5. Issued common stock for $8,000 cash.
6. Declared and paid $22,000 in cash dividends.

Compute the Inventory Turnover and Profit Margin, using the Income Statement & Comparative Balance Sheets from Question 1 (Statement of Cash Flows).
Inventory Turnover =	Inventory Turnover = COGS / Average Inventory
Profit Margin =	Profit Margin = Net Income / Net sales