A sporting goods store with sales for the year of $400,000 and other income of $32,000 has operating expenses of $123,000. Its cost of goods sold is $207,000. What are its gross margin, operating profit, and net profit in dollars? Show all work.
To calculate the gross margin, operating profit, and net profit, we need to use the given information.
Gross Margin:
Gross Margin = Sales - Cost of Goods Sold
Gross Margin = $400,000 - $207,000
Gross Margin = $193,000
Operating Profit:
Operating Profit = Gross Margin - Operating Expenses
Operating Profit = $193,000 - $123,000
Operating Profit = $70,000
Net Profit:
Net Profit = Operating Profit + Other Income
Net Profit = $70,000 + $32,000
Net Profit = $102,000
Therefore, the gross margin is $193,000, the operating profit is $70,000, and the net profit is $102,000.