Question

In: Finance

Your firm has the following data Income Statement Sales $50,250,000 Income tax: $1,744,000 Operating Expenses $10,115,000...

Your firm has the following data Income Statement

Sales $50,250,000

Income tax: $1,744,000

Operating Expenses $10,115,000

Cost of good sold $35,025,000

Interest expense $750,000

a. What is the amount of EBIT?

b. What is the amount of Gross Profit of the firm?

c. What is the amount of Income before contributions from the firm?

Expert Solution

Answer (a):- EBIT = Sales - Cost of goods sold - Operating Expenses

EBIT = $50,250,000 - $35,025,000 - $10,115,000

= $5,110,000

Answer (b):- Gross Profit = Sales - Cost of goods sold

Gross Profit = $50,250,000 - $35,025,000

= $15,225,000

Answer (c):- Income before contributions from the firm is actually Earnings before tax which is equal to:-

= EBIT - Interest Expense

= $5,110,000 - $750,000

= $4,360,000

jeff jeffy answered 2 years ago

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