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Below are amounts found in the income statements of three companies.

Company	Sales Revenue				Cost of Goods Sold				Operating Expenses				Non-operating Expenses				Income Tax Expense
Henry	$	38,000			$	13,300			$	5,300			$	2,300			$	2,300
Grace		41,000				27,880				13,400				7,300				0
James		46,000				27,600				3,300				0				3,300

Required:

1. For each company, calculate (a) gross profit, (b) operating income, (c) income before income taxes, and (d) net income. (Negative amounts should be indicated by a minus sign.)

2-a. For each company, calculate the gross profit ratio.

2-b. Which company has the most favorable ratio?

multiple choice

• Henry

• Grace

• James