QRS Enterprises

• Starting Inventory: $35,000
• Net Purchases: $125,000
• Ending Inventory: $45,000
• Revenue from Sales: $190,000
• Operating Costs: $28,000

Requirements:

1. Compute the Cost of Goods Sold (COGS).
2. Prepare an income statement.
3. Calculate gross profit and gross profit margin.
4. Calculate operating profit margin.
5. Discuss the importance of sales growth in relation to operating profit margin.