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Compute the firm operating profit margin

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Reference no: EM133159348

Question - Last year Cito's Corporation had sales of $600,000, with a cost of goods sold of $215,000. The firm's operating expenses were $230,000, and its increase in retained earnings was $55,000. There are currently 18,000 shares of common stock outstanding, the firm pays a $1.90 dividend per share, and the firm has no interest-bearing debt.

Required -

a) Assuming the firm's earnings are taxed at 25 percent, construct the firm's income statement.

b) Compute the firm's operating profit margin and gross profit margin. Write all the steps clearly.

Reference no: EM133159348

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