Below are two years’ income statement records of the HTM Corp (imaginary). According to the given information, please answer the following questions.
Income Statement
HTM Corp
Dec. 31, 2XX1 2XX2
Sales $1,200,000 $1,500,000
Cost of Sales $ 360,000 $ 480,000
Gross Profit $ 840,000 $1,020,000
Payroll Expenses $ 300,000 $ 360,000
Gen. & Admin. Exp. $ 144,000 $ 180,000
Other Expenses $ 120,000 $ 180,000
EBT $ 276,000 $ 300,000
Income Taxes $ 110,400 $ 120,000
Net Income $ 165,600 $ 180,000
1. Determine the ROS of 2XX1. Provide your answer rounded to the first decimal in percentage (as in ##.#%).
2. Determine the ROS of 2XX2. Provide your answer rounded to the first decimal in percentage (as in ##.#%).
3. Determine the growth rate of its sales in the 2XX2 from 2XX1.
4. Determine the growth rate of its Net Income in the 2XX2 from 2XX1 with two decimal points in percentage.
5. Determine the tax rate of the company in 2XX1. Provide your answer with one decimal point in percentage.
1 | ROS | EBT / Sales | 276,000 / 1,200,000 | 23.0% |
2 | ROS | EBT / Sales | 300,000 / 1,500,000 | 20.0% |
3 | Growth rate | (1,500,000 - 1,200,000) / 1,200,000 | 25.00% | |
4 | Growth rate | (180,000 - 165,600) / 165,600 | 8.70% | |
5 | Tax Rate | Income Taxes / EBT | 110,400 / 276,000 | 40.0% |
The answers to 1 and 2 would be as follows if net income is used instead
1 | ROS | Net Income / Sales | 165,600 / 1,200,000 | 13.8% |
2 | ROS | Net Income / Sales | 180,000 / 1,500,000 | 12.0% |
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