Your firm has the following income statement items: sales of $52,000,000; income tax of $1,880,000; operating expenses of $9,000,000; cost of goods sold of $36,000,000; and interest expense of $800,000. Compute the firm's gross profit margin.
A) 13.5%
B) 8.3%
C) 30.8%
D) 69.2%

Question

Quizplus · Accepted Answer

Gross Profit = Sales - Cost of goods sold
Gross Profit = $52,000,000 - $36,000,000 = $16,000,000

Gross Profit Margin = (Gross Profit / Sales) x 100%
Gross Profit Margin = ($16,000,000 / $52,000,000) x 100%
Gross Profit Margin = 30.8%

Your Firm Has the Following Income Statement Items: Sales of $52,000,000;