Compute the gross profit margin and operating income margin

Assignment Help Financial Management

Reference no: EM131306830

Assignment

In this module, you were introduced to the income statement and profitability ratios. In this assignment, use the information to create an income statement and then analyze it for profitability. Selected accounts for Jackson, Inc. are listed below along with their balances before closing the year of 12/31/12. Jackson, Inc. is a firm that manufactures wireless mouse systems for laptops. Use this information to complete the required elements below.

Interest expense	2,000
Sales revenue	297,000
Selling expenses	38,200

Administrative expenses	16,700
Cost of goods sold	162,300
Dividends1	12,200

Gain on sale of equipment	3,600
Loss from fire	7,500
Retained Earnings (1/1/12 balance)	335,000
Tax expense	22,800

Dividends were declared and paid to Jackson, Inc. stockholders

Required:

On a spreadsheet, prepare a multistep income statement for the year ending 12/31/12 with proper heading. See link below for sample income statement. Near the bottom of your income statement should be a subtotal for income before taxes and then you should subtract taxes to compute net income. Net income should have a double underline.
On the same spreadsheet, prepare a statement of retained earnings for the year ending 12/31/12 with proper heading. See link below for sample statement of retained earnings. There are no adjustments to retained earnings and ending retained earnings should have a double underline.
On the same spreadsheet, compute the gross profit margin, operating income margin, and net profit margin for 2012, showing the numerator and denominator for all ratios. Take ratios out to the nearest hundredth of a percentage (e.g., 33.33%).
On the same spreadsheet, write a paragraph analyzing each of the profitability ratios for Jackson, Inc. given the following information from previous years and competitors.

	Gross profit margin	Operating income margin	Net profit margin
Jackson, 2011	47.22%	26.52%	17.75%
Jackson, 2010	48.87%	25.43%	17.03%
Competitor, 2012	43.22%	31.20%	21.14%

The following links provide sample formatting for income statements and statements of retained earnings.

https://www.accountingcoach.com/online-accounting-course/04Xpg04.html#income-statement-multiple-step
https://accountingexplained.com/financial/statements/retained-earnings-statement

Reference no: EM131306830

Questions Cloud

What market structure does airline industry likely resemble : Late in the day on August 7,2006 numerous U.S. airlines cut their fares on leisure travelers. What market structure does the airline industry most likely resemble and why?

Why the estimates from the two valuation methods differ : Explain why the estimates from the two valuation methods differ. Address the assumptions implicit in the models themselves as well as those you made during the valuation process.

Design a perceptron network to solve this problem : Consider again the four-class decision problem that we introduced in Problem P4.3. Train a perceptron network to solve this problem using the perceptron learning rule.

What are some projects in place that will address problem : What are some projects in place that will address the problem (suggest one if none exist yet)? Why did you choose your topic? How has learning about the topic affected your ideas going into this assignment?

Compute the gross profit margin and operating income margin : On the same spreadsheet, compute the gross profit margin, operating income margin, and net profit margin for 2012, showing the numerator and denominator for all ratios.

Submit your topic of interest and tell how it relate to race : In a Word document, submit your topic of interest, tell how it relates to race and ethnicity or social change, and explain what you hope to learn from this topic. You will also provide a brief summary of the article.

How to implement a priority-based scheduler : COP4610: Introduction to Operating Systems - Project 4: Priority-based Scheduler - you will learn how to implement a priority-based scheduler forxv6. To get started, download a new copy of the xv6 source code fromhere.

How do you think you will feel after the reactions : Is it a formal norm or an informal one? What reactions by others do you expect? If published, might these reactions affect your life chances? How do you think you will feel after the reactions?

What implications does imperfect nature of type of research : What implications does the imperfect nature of this type of research have for social psychological science? How can these two competing views (by the same person) be reconciled?

User Account

All Pages