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Unformatted text preview: Preparing an Income Statement Coyote, Inc. Company Multi-Step Income Statement 200x 201x 202x Net Sales 1,833,000 $ Cost of Goods Sold 1,072,000 Gross Profit 761,000-- Selling and Administrative Expenses 454,000 Advertising Depreciation and Amortization 14,000 Repairs and Maintenance Operating Profit 293,000-- Other Income (Expense) Interest Income 13,000 Interest Expense (16,000) Earnings Before Interest and Taxes 290,000-- Income Taxes 116,000 Net Earnings 174,000 $ - $ - $ Coyote, Inc. has a good profit margin measured as 41.51% and also a good net profit margin measured as 9.5%. The multi-step method seemingly benefits the company, although in an overall perspective, the cost of the goods sold is not necessarily included in the computation of net sales, every are of a business just cannot be simply taken for granted. The company would also retain a profit of about $290k, if the depreciation and SG&A are eliminated from the Equation. But the flow of cash does not end there, since the company will have a net profit of Equation....
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