Calculate the gross profit and gross profit margin


Problem:

Use the following information on Firm A and B to answer the questions 1, 2, and 3.

Firm A Firm B

Revenue 230,000 390,000

COGS 92,000 175,500

Operating Expenses 120,000 150,000

Net Income 6,300 22,575

Total Assests 50,000 215,000

Equity 20,000 150,000

Required:

Question 1: Calculate the Gross Profit (in dollars) and Gross Profit Margin (%) for A and B.

Question 2: Calculate EBIT (in dollars) and Operating Profit Margin (%) for A and B.

Question 3: Calculate ROA (%) and ROE (%) for A and B (using assets and equity provided).

Note: Please show guided help with steps and answer.

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Accounting Basics: Calculate the gross profit and gross profit margin
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