Tabor Hill Designers

Income Statement

For the Month Ended February 28, Current Year

Design revenue

$60,000

Operating expenses:

Wage expense

16,000

Utilities expense

500

Telephone expense

250

Total operating expenses

16,750

Income from operations

43,250

Other items:

Interest expense

(100)

Income before income taxes

43,150

Income tax expense

0

Net income

$43,150

Refer to the income statement above and calculate the net profit margin ratio of Tabor Hill Designers for the month ending February 28 of the current year. Then, indicate what this ratio measures and how you would interpret the results. 5pts.

1. Calculation:

2. What it measures and how to interpret: