KPB spends money for labor, materials, and fixed assets (depreciation) to make products-and spends still more money to sell those products. Then the firm makes sales that result in receivables, which eventually result in cash inflows. Does it appear that KPB sales price exceeds its costs per unit sold? How does this affect the cash balance? Gross Margin: It tells how much of every dollar made its left after covering the cost of goods Gross Margin =RevenueGrossIncome BALANCE SHEET Table IC 3-2. Income Statements Note: a The firm had sufficient taxable income in 2006 and 2007 to obtain its full tax refund in 2008. TABLE IC3-3. Statement of Stockholders' Equity, 2008