using the following IS and balance sheets for ABC to calculate the profit margin for the year 2005

A- 1.098%

B- 10.667%

C- (1.356)%

D- 12.087%

E- (2.222)%

5 6 HAB ABC Income Statement Ending Dec. 31st $ 2005 2006 Net Sales COGS $1,800,000 1,080.000 720,000 180,000 Gross Profit Marketing Expenses General Administrative (G&A)Expenses Depreciation expense EBIT 3.000.000 1.800.000 1.200.000 300,000 500,000 80,000 500.000 320,000 -Interest 80,000 -40,000 90,000 - 130,000 EBT 120,000 200,000 50.000 -Taxes 0 Net Income - 130,000 150,000 Dividends 0 70,000 Change in Retained Earnings 0 80,000 Balance Sheet Ending Dec. 315) Left Hand Side of the B.S. Assets 2005 2006 Change Average Cash Receivables 100 000 400,000 800,000 40.000 560,000 Inventories 1.000.000 Total Current Assets Gross Fixed Assets 1,300,000 900.000 200.000 Less: Accumulated Depreciation 1,500,000 1,000,000 280,000 800,000 2.400,000 Net Fixed Assets 700,000 2,000,000 Total Assets Right Hand Side of the B.S. Liabilities and Equity Payables Accrued Wages 320,000 260,000 100,000 180,000 540,000 Bank Loan 140,000 200.000 660,000 Total Current Liabilities 600,000 800.000 Long-term Debt Owner's Equity Common Stock (par) 300,000 300.000 Less Accumulated Net Foxed Assets 700.000 2,000,000 800,000 2,400,000 Total Assets Right Hand Side of the B.S. Liabilities and Equity Payables Accrued Wages 260,000 100,000 180,000 540,000 320.000 140,000 200,000 660,000 Bank Loan Total Current Liabilities 600.000 800.000 Long-term Debt Owner's Equity 300,000 300,000 Common Stock (@par) 400,000 400.000 Additional paid-in-capital Retained Earnings 160,000 240,000 Total liabilities and equity $2,000,000 $2,400.000