Financial Statement Analysis
Response to the following problem:
You have obtained the following data for the Jacob Company for the year ended December 31, 2009. (Some income statement items are missing.)
Cost of goods sold $485,000
General and administrative expenses 80,000
Interest expense 8,500
Net income 12,000
Sales 790,000
Tax expense, 8,000
Answer each of the following questions:
1. What is the total gross profit?
2. What is the amount of operating income?
3. What is the amount of other operating expenses (in addition to general and administrative expenses)?
4. What is the gross profit percentage (that is, gross profit as a percentage of sales)?
5. If the return on assets is 4%, what are the total assets?
6. If the return on stockholders' equity is 8%, what is the stockholders' equity?
7. What is the return on sales?
8. What is the income tax rate? (Tax Expense/Income before Taxes)