Calculate the gross profit margin, operating profit margin, and net profit margin For Microsoft Corpration. Write a short 1- 2 paragraph explanation of the profit margins calculated.
Calculate the gross profit margin, operating profit margin, and net profit margin For Microsoft Corpration. Write a short 1- 2 paragraph explanation of the profit margins calculated.
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Dr. Zhivago Diagnostics Corp.'s income statement for 20X1 is asfollows:
Sales | $ | 2,710,000 | |
Cost of goods sold | 1,850,000 | ||
Gross profit | $ | 860,000 | |
Selling and administrative expense | 346,000 | ||
Operating profit | $ | 514,000 | |
Interest expense | 58,000 | ||
Income before taxes | $ | 456,000 | |
Taxes (30%) | 136,800 | ||
Income after taxes | $ | 319,200 | |
a. Compute the profit margin for 20X1.(Input the profit margin as a percent rounded to 2 decimalplaces.)
b. Assume in 20X2, sales increase by 10 percentand cost of goods sold increases by 20 percent. The firm is able tokeep all other expenses the same. Once again, assume a tax rate of30 percent on income before taxes. What is income after taxes andthe profit margin for 20X2? (Input the profit margin as apercent rounded to 2 decimal places.)