Question 3:

ABC Company Income Statement Analysis

Income Statement (in thousands)

• Sales: $1,000
• Cost of Sales: $600
• Gross Profit: $400
• Operating Expenses: $250
• Operating Income: $150
• Interest Expense: $20
• Income Before Tax: $130
• Taxes: $40
• Net Income: $90

Requirements:

1. Verify the Gross Profit.
2. Calculate the Operating Margin.
3. Calculate the Net Profit Margin.
4. Determine the Effective Tax Rate.
5. Calculate the Earnings Before Interest and Taxes (EBIT).