Question

Accounts payable= 45,000

Accounts receivable= 122,400

Accruals= 13,500

Additional paid in capital= 216,660

Cash= ???

Common Stock @ par value= 42,000

COGS= 179,106.00

Depreciation expense= 22,119.00

Interest expense= 16,749.00

Inventories= 115,200

Long-term debt= 139,498.00

Net fixed assets= 399,600

Notes payable= 64,800

Operating expenses (excl. depr.)= 62,080.00

Retained earnings= 136,800

Sales= 338,431.00

Taxes= 18,725.00
What is the firm's current year net profit margin?

Answer 1

To calculate the net profit margin, we first need to determine the net profit. The formula for net profit can be stated as follows:

\[
\text{Net Profit} = \text{Sales} - \text{Total Expenses}
\]

Total expenses include Cost of Goods Sold (COGS), operating expenses (excluding depreciation), depreciation expense, interest expense, and taxes.

### 1. Calculate Total Expenses
We start by calculating the total expenses:

\[
\text{Total Expenses} = \text{COGS} + \text{Operating Expenses} + \text{Depreciation Expense} + \text{Interest Expense} + \text{Taxes}
\]

Substituting the values provided:

- COGS = \(179,106.00\)
- Operating Expenses = \(62,080.00\)
- Depreciation Expense = \(22,119.00\)
- Interest Expense = \(16,749.00\)
- Taxes = \(18,725.00\)

\[
\text{Total Expenses} = 179,106 + 62,080 + 22,119 + 16,749 + 18,725
\]

Calculating this step-by-step:

- \(179,106 + 62,080 = 241,186\)
- \(241,186 + 22,119 = 263,305\)
- \(263,305 + 16,749 = 280,054\)
- \(280,054 + 18,725 = 298,779\)

So, the Total Expenses is:

\[
\text{Total Expenses} = 298,779.00
\]

### 2. Calculate Net Profit
Now, we can determine the net profit:

\[
\text{Net Profit} = \text{Sales} - \text{Total Expenses}
\]

Substituting the values:

- Sales = \(338,431.00\)

\[
\text{Net Profit} = 338,431 - 298,779 = 39,652
\]

### 3. Calculate Net Profit Margin
The net profit margin is calculated using the following formula:

\[
\text{Net Profit Margin} = \left(\frac{\text{Net Profit}}{\text{Sales}}\right) \times 100
\]

Substituting the values:

\[
\text{Net Profit Margin} = \left(\frac{39,652}{338,431}\right) \times 100
\]

Calculating this quotient:

\[
\frac{39,652}{338,431} \approx 0.117
\]

Now, converting it into a percentage:

\[
\text{Net Profit Margin} \approx 0.117 \times 100 \approx 11.7\%
\]

### Conclusion:
The firm's current year net profit margin is approximately **11.7%**.

Answer 2

What is the firm's net income for the current year?