Below are amounts found In the Income Statements of three companies: Company Net Sales Cost of Good Sold Expense Non-operating Expense Income Tax Expense
Henry $46,000 11,500 $5,700 $2,700 $2,700
Grace 49,000 35,280 16,800 7,700 0
James 54,000 34,560 3,700 0 3,700
Required:
1. For each company, calculate (a) gross profit, (b) Operating income, (c) Income before income taxes, and (d) net income.
2- a. For each company, calculate the gross profit ratio.
2- b. Which company has the most favorable ratio?