Consider the following incomplete income statement:

Sales=$2,531,700.00
COGS=39.00% of sales
Gross Profit Margin=61.00% of sales
Selling & Administrative=$704,250.00
Depreciation & Amortization=$?????
Operating Profit Margin=12.00%
What is the gross profit for 2023?

7 answers

To calculate the gross profit for 2023, we can use the provided information about sales and the gross profit margin.

  1. Sales: $2,531,700.00
  2. Gross Profit Margin: 61.00% of sales

To find the gross profit, we apply the gross profit margin to the sales:

\[ \text{Gross Profit} = \text{Sales} \times \text{Gross Profit Margin} \]

\[ \text{Gross Profit} = 2,531,700.00 \times 0.61 \]

Calculating that:

\[ \text{Gross Profit} = 2,531,700.00 \times 0.61 = 1,545,757.00 \]

Thus, the gross profit for 2023 is $1,545,757.00.

What is the operating profit for 2023?

To calculate the operating profit for 2023, we can use the information provided regarding the sales, the operating profit margin, and the expenses.

Given Information:

  • Sales: $2,531,700.00
  • Operating Profit Margin: 12.00%

Step 1: Calculate Operating Profit

Operating profit can be calculated by multiplying the sales by the operating profit margin:

\[ \text{Operating Profit} = \text{Sales} \times \text{Operating Profit Margin} \]

\[ \text{Operating Profit} = 2,531,700.00 \times 0.12 \]

Calculating that:

\[ \text{Operating Profit} = 2,531,700.00 \times 0.12 = 303,804.00 \]

Conclusion

The operating profit for 2023 is $303,804.00.

What is the cost of goods sold for 2023?

To calculate the Cost of Goods Sold (COGS) for 2023, we can use the provided information about sales and the percentage of COGS relative to sales.

Given Information:

  • Sales: $2,531,700.00
  • COGS: 39.00% of sales

Step 1: Calculate COGS

COGS can be calculated using the formula:

\[ \text{COGS} = \text{Sales} \times \text{COGS %} \]

Substituting the values:

\[ \text{COGS} = 2,531,700.00 \times 0.39 \]

Calculating that:

\[ \text{COGS} = 2,531,700.00 \times 0.39 = 986,163.00 \]

Conclusion

The Cost of Goods Sold (COGS) for 2023 is $986,163.00.

What is the depreciation and amortization for 2023?

To determine the Depreciation and Amortization for 2023, we need to consider the operating profit calculated earlier, as well as the total expenses involved in arriving at the operating profit. Here’s a step-by-step approach:

Given Information:

  • Sales: $2,531,700.00
  • COGS: $986,163.00 (already calculated)
  • Selling & Administrative Expenses: $704,250.00
  • Operating Profit Margin: 12.00%
  • Calculated Operating Profit: $303,804.00 (already calculated)

Step 1: Calculate Total Expenses

We know the Operating Profit can be calculated using the formula:

\[ \text{Operating Profit} = \text{Gross Profit} - \text{Total Expenses} \]

However, since Gross Profit is not directly provided here, we can rearrange to use the following formulas:

\[ \text{Gross Profit} = \text{Sales} - \text{COGS} \]

Then we can find Total Expenses using:

\[ \text{Total Expenses} = \text{Selling & Administrative} + \text{Depreciation & Amortization} \]

Step 2: Calculate Gross Profit

From our previous calculations:

\[ \text{Gross Profit} = \text{Sales} - \text{COGS} \] \[ \text{Gross Profit} = 2,531,700.00 - 986,163.00 = 1,545,537.00 \]

Step 3: Calculate Total Expenses

Now we will rearrange the formula for Operating Profit:

\[ \text{Operating Profit} = \text{Gross Profit} - \text{Total Expenses} \] \[ \text{Total Expenses} = \text{Gross Profit} - \text{Operating Profit} \]

Substituting our values:

\[ \text{Total Expenses} = 1,545,537.00 - 303,804.00 = 1,241,733.00 \]

Step 4: Calculate Depreciation and Amortization

From our calculation, we know:

\[ \text{Total Expenses} = \text{Selling & Administrative} + \text{Depreciation & Amortization} \]

Substituting known values:

\[ 1,241,733.00 = 704,250.00 + \text{Depreciation & Amortization} \]

Rearranging the equation gives us:

\[ \text{Depreciation & Amortization} = 1,241,733.00 - 704,250.00 \] \[ \text{Depreciation & Amortization} = 537,483.00 \]

Conclusion

The Depreciation and Amortization for 2023 is $537,483.00.