Profitability and the Income Statement

Presented below is income statement data for Short & Company as of year$-$end:

Income Tax Expense $$5,400$

Cost of Goods Sold $14,300$

Other Expenses $500$

Net Revenue $62,950$

Operating Expenses $27,000$

Required

Prepare a multi$-$step income statement.

Note: Do not use negative signs with your answers.

SHORT & COMPANY

Income Statement

Current Year

Answer

Net Revenue

Answer

$62,950$

Answer

Cost of Goods Sold

Answer

$14,300$

Gross Profit on Sales Answer

$48,650$

Answer

Operating Expenses

Answer

$27,000$

Operating Income Answer

$21,650$

Answer

Other Expenses

Answer

$500$

Income before Income Taxes Answer

$0$

Answer

Income Tax Expense

Answer

$5,400$

Net Income Answer

$0$

Calculate the company's return on sales ratio. Round the return on sales ratio to one decimal place.

If Short's return on sales was $16$ percent in the prior year, is the company's profitability improving or declining?

Return of sales for current year$=$ Answer

$0$

and thus,

the company's profitability is Answer

improving

$.$