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(Related to Checkpoint 4.3) (Profitability analysis) Last year the P. M. Postem Corporation had sales of $400,000, with a cost of goods sold of
(Related to Checkpoint 4.3) (Profitability analysis) Last year the P. M. Postem Corporation had sales of $400,000, with a cost of goods sold of $112,000. The firm's operating expenses were $130,000, and its increase in retained earnings was $67,500. There are currently 22,000 shares of common stock outstanding, the firm pays a $1.60 dividend per share, and the firm has no interest-bearing debt. a. Assuming the firm's earnings are taxed at 35 percent, construct the firm's income statement. b. Compute the firm's operating profit margin. a. Assuming the firm's earnings are taxed at 35%, construct the firm's income statement. Complete the income statement below: (Round to the nearest dollar.) Income Statement Revenues $ Cost of Goods Sold Gross Profit $ Operating Expenses Net Operating Income $ Interest Expense Earnings before Taxes $ Income Taxes Net Income b. Compute the firm's operating profit margin. The operating profit margin is %. (Round to one decimal place.)
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