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Refer to the tables above. Compute Megaframe's after-tax profit margin.
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| ASSETS | |
|---|---|
| Cash | $ 50,000 |
| Accounts receivable | 70,000 |
| Inventory | 110,000 |
| Net plant and equipment | 220,000 |
| Total assets | $ 450,000 |
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |
| Accounts payable | $ 70,000 |
| Accrued expenses | 50,000 |
| Long-term debt | 130,000 |
| Common stock | 70,000 |
| Paid-in capital | 40,000 |
| Retained earnings | 90,000 |
| Total liabilities and stockholders’ equity | $ 450,000 |
| Sales (all on credit) | $ 875,000 |
|---|---|
| Cost of goods sold | 600,000 |
| Gross profit | $ 275,000 |
| Sales and administrative expenses | 30,000 |
| Depreciation | 55,000 |
| Operating profit | $ 190,000 |
| Interest expense | 25,000 |
| Profit before taxes | $ 165,000 |
| Taxes (30%) | 49,500 |
| Net income | $ 115,500 |
Refer to the tables above. Compute Megaframe's after-tax profit margin.
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